Fund manager, adviser and administrator SEI, with some USD1.3 trillion in assets under management, administration or advisement, is to enter the ETF industry, launching, in the US, a suite of four large-cap, factor-based strategies designed to support a goals-based wealth management approach.
The new funds include the SEI Enhanced U.S. Large Cap Quality Factor ETF (Cboe: SEIQ); SEI Enhanced U.S. Large Cap Momentum Factor ETF (Cboe: SEIM); SEI Enhanced U.S. Large Cap Value Factor ETF (Cboe: SEIV) and the SEI Enhanced Low Volatility U.S. Large Cap ETF (Cboe: SELV).
Kevin Barr, Head of SEI’s Investment Management Unit, in an interview with ETF Express, says: “Our strategy is based on providing asset allocation models and over the last several years we have seen a proliferation of ETFs, which have worked well in an environment that had the economic and monetary regime we have been experiencing over the last few years.
“Active management has been challenged but the last few months saw a pick-up in volatility and what clients are looking for is to protect themselves to dampen the volatility, so active management comes back into favour.
“These four ETFs are actively managed by our quantitative in-house equity team in London which has been running these strategies for some times in a separately managed account framework. When we recognised the opportunity was there to introduce these products, we took the opportunity to do so.”
Barr also confirmed that the firm plans to launch ETFs in Europe as well. “Our approach to asset management has been consistent in the geographies in which we operate. Certainly, we see a lot of consistency in our product line-up in all the regions we operate in so we will look to take these products into Europe where we can differentiate.
“These are truly active products and are expected to not only generate excess returns but provide benefits on the risk management side as well.”
ᐧSEI’s Factor ETF suite seeks to provide long-term capital appreciation, utilising a quantitative-based, active stock selection investment strategy to evaluate large-capitalisation stocks tailored to each of the respective factors. The ETFs are optimised to a portfolio with exposure to equity securities corresponding to each relevant factor or outcome, while concurrently managing additional exposures to other factors. The ETFs have a 15 bps management fee.