Actively Managed Eco-Friendly & Sector-Rotation ETFs

Last summer Columbus, OH based Huntington made their foray into the ETF space by launching both HECO (Huntington EcoLogical Strategy, Expense Ratio 0.95%) and HUSE (Huntington U.S. Equity Rotation Strategy, Expense Ratio 0.95%), and the two funds have posted promising performance since inception.

Both of these ETFs are actively managed and small still in terms of assets under management (HECO has $15 mln while HUSE has $12.6 mln). Average daily trading volume is very low across these two funds as well (less than 5,000 shares apiece ADV) but this is pretty much expected and the ordinary when it concerns newer, actively managed “niche” products. [Huntington Launches First ETF]

Known as Huntington StrategyShares, HECO seeks out companies that “have positioned their business to respond to increased environmental legislation, cultural shifts toward environmentally conscious consumption, and capital investments in environmentally oriented projects. These companies include all companies that are components of recognized environmentally-focused indices.”

So in short, there is clearly a “green” or “ecological” tilt here in terms of which equities are being considered for inclusion in this actively managed fund. Top holdings at the moment are HAIN (5.34%), EBAY (5.10%), WFM (5.02%), BWA (3.73%), and QCOM (3.40%). One may look at this quick list and note the interesting dispersion across very different lines of business here (Consumer Staples, Internet Services, Retail-Food, Automotive, Telecom Equipment).

HUSE on the other hand “invests in companies that are organized in the U.S. and included in the S&P Composite 1500, which is comprised of large-cap, mid-cap, and small-cap companies. The ETF may over- or under-weight certain industry sectors and segments of the S&P Composite 1500, depending on which the managers believe to have the greatest or least potential for capital appreciation given the current market environment.”

So in layman’s terms, it’s an actively managed “U.S. Sector rotation strategy” which is a very common investment offering across various SMAs in the marketplace, within individual Mutual Funds, as well as having a presence now to a limited degree in the ETF space.