Hartford Funds is expanding its lineup with two actively managed exchange traded funds backed by strategies from Wellington Management Company to help fixed-income investors navigate a changing market environment. Wellington is where John Bogle, the Vanguard founder cut his teeth on money management. It seems like investment management is coming full circle with this partnership as a tenured insurance company and a legendary management firm partner on new ETF offerings.
On Wednesday, Hartford Funds rolled out the Hartford Corporate Bond ETF (NYSEArca: HCOR) and the Hartford Quality Bond ETF (NYSEArca: HQBD). HCOR comes with a 0.44% expense ratio and HQBD has a 0.39% expense ratio.
“In response to advisors’ call for a broad range of investment options, we’ve decided to further diversify our ETF lineup and enter the actively managed ETF space with two fixed income products,” Vernon Meyer, Chief Investment Officer of Hartford Funds, said in a note. “By fusing our ETF capabilities with the investment skill of Wellington Management, we are looking to maximize the value Hartford Funds can offer to investors.”
The two active ETFs are subadvised by institutional investment manager Wellington Management, which also subadvises a number of mutual funds for Hartford. Craig A. Gainey, Senior Managing Director, Partner, and Fixed Income Portfolio Manager/Credit Analyst, will manage HCOR.
The Hartford Corporate Bond ETF will try to provide total return with income as a secondary objective by investing in U.S. dollar-denominated, investment-grade rated fixed-income securities issued by corporate entities.
Wellington Management employs a bottom up approach to portfolio management, identifying issuers with favorable credit fundamentals and attractive total returns. The fund will also maintain a dollar weighted average duration equivalent to that of the Bloomberg Barclays U.S. Corporate Bond Index.
Michael F. Garrett, Senior Managing Director and Fixed Income Portfolio Manager, Val Petrov, Managing Director and Fixed Income Portfolio Manager, and Brian Conroy, Vice President and Fixed Income Portfolio Manager, will manage HQBD.
The Hartford Quality Bond ETF will try to maximize total return while providing a high level of current income consistent with prudent investment risk by investing in securities considered attractive from a total return perspective while providing current income.
The majority of holdings will be comprised of investment-grade fixed-income securities and will also include assets in mortgage-related securities, along with credit sectors, including non-agency residential and commercial mortgage-backed securities, asset backed securities, corporate bonds and covered bonds. The ETF may hold government debt exposure and utilize derivatives.
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