Strive Asset Management has launched its eighth index fund: the Strive Emerging Markets Ex-China ETF (STXE). The firm writes that STXE is a passively managed ETF that seeks exposure to large- and mid-capitalisation equity securities across 24 emerging market economies, excluding China, designed to offer investors exposure to emerging markets while minimising China-related risks.
Strive believes that China’s autocratic regime, economic vulnerabilities, and military posture towards its neighbours, including Taiwan, create meaningful risks for global investors. Strive believes that other large environmental, social, and governance (ESG) promoting financial institutions with asset management businesses in China are unable to adequately educate US clients about these risks due to their conflicts of interests in China.
Strive is launching STXE with USD100 million from a leading institutional investor. With the launch of STXE, Strive also expands its product offerings to include international exposure to its clients. Strive will advance its pro-excellence agenda by mandating ex-US companies to focus on excellence over political or social agendas, building on Strive’s approach to shareholder engagement and proxy voting in the U.S.
“ESG-promoting asset managers are vocal about supposed investment risks relating to board diversity and climate change, yet they are conspicuously silent about one of the most proximal investment risks that all investors face: the behaviours of Communist China,” notes Vivek Ramaswamy, Executive Chairman and Co-Founder of Strive. “It’s no mystery why: they have deep conflicts of interest in China that prevent them from being as vocal about these issues or from imposing the same ESG constraints onto Chinese companies as they do for US companies. Strive refuses to build an asset management business in China to avoid these conflicts of interest so that we can better serve our U.S. clients as a vocal fiduciary advocating for excellence.”
“With the launch of STXE, we aim to offer our clients the opportunity to invest internationally,” says Anson Frericks, President and Co-Founder of Strive. “We are launching STXE at a moment of escalating cross-Straits tensions between the US, China, and Taiwan, and we expect these tensions to worsen during the course of Xi Jinping’s unprecedented third term with a rising risk of conflict surrounding Taiwan.”