For this week’s episode of ETF 360, ETF Trends CEO Tom Lydon and CIO Dave Nadig spoke with Gabelli Funds’ Co-CIO of Value Chris Marangi and Co-PM of Growth Chris Ward, as they discuss the recent launches of the Love Our Planet & People ETF (LOPP) and the Gabelli Growth Innovators ETF (GGRW) and their entrance into the ETF space.
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In an early focus on active management, as far as stocks picking back, Ward explains how the last decade may have been challenging for active managers on a relative basis due to the biggest market cap companies being the best performers. As a result, it made for a hard dynamic for active managers to compete with.
For Gabelli, as Ward states, “The key to our performance in our existing Gabelli growth and global growth mutual funds has been finding names outside the mega-caps that have generated alpha.”
Looking forward, as mega-caps have become less correlated and more companies outside tech are embracing technology to level the competitive landscape, active managers are now in a better position to capitalize on the times.
As far as finding that value for active managers, Marangi believes the extent that flows are to indices, which are irrespective of fundamentals, creates opportunities for Gabelli to make price discovery and exploit those inefficiencies. Additionally, while less than a year ago, the opportunities were thought to be a small gap in value, the belief is that there’s still opportunity there as more confidence about the trajectory of reopening grows.
Marangi continues, “We’re focused on a number of key themes that we’ve been focused on for a long time. The graying of the car population, the graying of the people population, health and wellness, the digitization of media, and, increasingly, sustainability.”
Loving The LOPP and Growing To GGRW
In regards to entering the ETF space, taking a look at the ESG fund, LOPP, first, Marangi states how it is a fund for those who want to preserve the environment for the future and their money for future generations. The focus is on companies that are actively trying to ensure a greener future. Those include companies dealing with renewable energy, electric vehicles, the ecosystem, etc.
Looking at GGRW, Ward explains how this fund’s approach is looking at areas across both the consumer and enterprise landscape that have seen a structural acceleration in digital transformation.
As Ward notes, “Consumers have leaned into digital channels to shop, to pay, to manage finances, and to entertain themselves. Meanwhile, the pandemic highlighted the need for enterprises to more agile, more secure, and more data-driven, to compete in this new normal where the entire customer experience is digital.”
“What’s really exciting, for us, is we are finally seeing what we think is a democratization of technologies across industries, Ward continues. “Our goal with growth innovators is to surface our best ideas benefiting from this paradigm.”
As far as what’s been seen in the markets and the swing back towards active managers, Marangi adds there’s plenty to be excited about. This is especially the case considering this is a real dynamic point in the economy, where active managers will need to adapt and be active.
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