Engine No. 1 announced the launch of its second actively managed ETF, the Engine No. 1 Transform Supply Chain ETF (CBOE: SUPP). SUPP, Engine No. 1’s latest thematic ETF, invests in companies that will drive supply chain resiliency and long-term value creation through relocalization of manufacturing, automation and innovation, and transportation and logistics management.
With SUPP, Engine No. 1 is working under the thesis that companies that lead during this transition will benefit from increased market share, higher perceived quality of goods, and dynamic cost management, resulting in increased shareholder value. The $3.5 trillion in global income eliminated by disruptions associated with the COVID-19 pandemic further demonstrated the need for companies to rethink their supply chains.
Additionally, U.S. companies were on a record pace to relocalize 350,000 jobs in 2022. Bringing manufacturing, transportation, and warehousing jobs to the U.S. creates a 5.1x employment multiplier. This shift in corporate priorities also benefits ongoing energy transition initiatives.
“It has never been more important for companies to make their supply chains more resilient, while also relocalizing manufacturing and jobs to North America,” said Eli Horton, who will serve as the fund’s lead portfolio manager. “We will invest in the companies that will drive and benefit from the ongoing supply chain transformation – creating long-term economic value and meaningful social and environmental impacts.”
SUPP, which had 28 holdings as of Tuesday, has an expense ratio of 0.75%. Top holdings in the fund as of Wednesday include Willscot Mobile Mini Holding (WSC), Martin Marietta Materials (MLM), and Advanced Drainage Systems (WMS).
Yasmin Dahya Bilger, head of ETFs at Engine No. 1, added: “We believe the entire supply chain system is changing and that transformation presents a once-in-a-generation opportunity for investors. We’re building a portfolio that capitalizes on the transition from old technologies to new ones, from short-term expediency to long-term value creation, and away from the low-cost-at-all costs thinking of the last 30 years towards a more resilient and modern American economy that is a leader in global competitiveness and that creates well-paying jobs here at home.”
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