The board overseeing two recently introduced exchange-traded funds from emerging asset manager Azoria Capital LLC has approved the closure and dissolution of both offerings.
This includes the Azoria 500 Meritocracy ETF and the Azoria Tesla Convexity ETF, as detailed in a filing submitted to the U.S. Securities and Exchange Commission on Wednesday evening.
In the document, the trustees explained their choice by pointing to a thorough review of key details, such as current legal disputes tied to a key figure at Azoria. Experts view this language as exceptionally direct for such announcements.
Unusual Wording Sparks Analyst Surprise
Industry observers find the phrasing in the filing noteworthy. Jeffrey Ptak, a Morningstar analyst, pointed out, “Such explicit references are rare. Most closure statements stick to standard formalities.”
The Meritocracy ETF, which started trading in June, manages around $35 million in assets. The Tesla Convexity ETF, introduced toward the end of September, holds about $6 million.
Founder’s Response to Legal Concerns
Azoria’s creator, James Fishback, acknowledged his participation in multiple court cases. These range from disputes with his past employer, the hedge fund Greenlight Capital LLC, to a suit Azoria brought against the Federal Open Market Committee for greater transparency on Federal Reserve interest rate deliberations.
Fishback argued that these matters do not impact his suitability to lead the funds. He described the situation as rooted in differing political perspectives.
Specifically, he suggested the trustees may disagree with his stances against diversity, equity, and inclusion initiatives, as well as his concerns over heavy reliance on H-1B visas by U.S. businesses.
Efforts to contact the trustees for their thoughts were unsuccessful.
Role of Service Providers in ETF Launches
The Azoria funds were developed with help from Tidal Financial Group, which offers turnkey solutions for asset managers entering the ETF space, along with the Tidal Trust III. This often involves setting up an independent oversight board.
Michael Venuto, Tidal’s co-founder and chief investment officer, indicated he lacks details on the trustees’ exact motivations. He stressed that Tidal continues to back various funds with comparable ideological positions, such as the God Bless America ETF.
This development underscores the complexities of blending personal viewpoints with regulatory oversight in the fast-growing ETF market. As the funds wind down, investors will soon receive updates on redemption processes and asset distributions.
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