Abstract: A filtered cathodic vacuum arc apparatus and method for the generation of a nanocluster film or compound film with improved characteristics onto a substrate and thin film materials, carbon-encapsulated metal nanoclusters and carbon nanotubes formed through the use of said apparatus and method. The apparatus includes a deposition chamber, a substrate holder for holding a substrate within the deposition chamber, means for simultaneously generating a first beam of plasma and a second beam of plasma from a first and a second plasma source, respectively, a Y-bend magnetic filter to direct the plasma towards a substrate on the substrate holder and an anti-Helmholtz coil set-up within the deposition chamber, wherein the Y-bend magnetic filter and anti-Helmholtz coil set up cause first and second beams of plasma to mix.