On Wednesday, Uncommon Giving Corporation announced the launch of its first values-based ETF on the NYSE. The Uncommon Portfolio Design Core Equity ETF (NYSE Arca: UGCE) is managed by its investment advisory affiliate, Uncommon Investment Advisors, and sub-advised by Portfolio Design Advisors, Inc.
UGCE is an actively managed ETF that seeks to achieve its investment objective of providing capital appreciation by investing primarily in equity securities. Investments are comprised of two different strategies managed by Portfolio Design Advisors (PDA).
“We are excited to partner with Uncommon Investments for the launch of our first ETF,” said Paul Knipping, PDA Portfolio Manager. “The fund combines two of our most popular strategies: our Large Cap Dividend Payer model, predominately a dividend paying strategy, and our Pure U.S. Equity model, which is a large cap growth strategy. We believe the combination of these two strategies creates a diversified large cap core ETF, which both taxable and tax-advantage clients can use.”
Off the Beaten Path?
Looking at the timing of the release, John Pileggi, Chief Investment Officer of Uncommon Giving and President of Uncommon Investment Advisors, told ETF Trends that: “Uncommon Giving created an asset management unit as a vehicle to support its overall mission and initiative to awaken generosity through a unique ecosystem of information, digital payments and a “democratized Donor Advised Fund.” We believed that we needed to feature certain franchise defining products as a part of the investment component, and since DAFs, like a 401k or a Health Savings account, are long term stores of value, we thought an equity product was critical.”
Pileggi continued: “We will soon be introducing a unique thematic Uncommon 50 ETF, but first we elected to bring to the market a Core Equity Fund which represented a strategy that had been time tested with a distinguished partner. Portfolio Design Advisors was established by some prior colleagues and friends who share our ‘client first’ ethos. And, PDA was seeking a commingled vehicle to replace its Separately Managed Accounts more efficiently. So, the moon and the stars lined up for the fulfillment of the mission of partner firms. We share an outcome orientation and a solution-based approach, and timing the equity markets was never a consideration.”
The sub-advisor will weigh the fund’s investments between 40-60 percent to each strategy. A significant advantage of the new ETF is that it allows financial advisors and individual investors to invest in PDA’s most popular strategies at a much lower minimum investment than its model portfolios.
“Advisors who utilize our unified managed account platform, Axiom, also can cost-efficiently access our strategies,” said Wes Strode, Senior Portfolio Manager at PDA. “The Uncommon team’s experience and knowledge in providing innovative, investable fund options were paramount in our decision to work with them for our first ETF.”
An Innovative Investment
In terms of making UGCE innovative in the rapidly expanding world of ETFs, Pileggi explained that: “In addition to the utilization by PDA in offering its existing clients an efficient commingled way to combine dividend payers and growth stocks, it is the first Uncommon Giving investment product that will be embedded in our proprietary Democratized DAF platform. Today there are in excess of $140 billion in similar donor-advised funds, which are ‘style box’ products and not specifically created to be part of a robust and digital generosity ecosystem. We believe this is a unique and innovative part of a solution that incorporates many elements of value. And, because the Fund has a ticker and is NYSE listed, it can be accessed in non Donor Advised accounts as well.”
Themed ETFs and investment products are part of Uncommon Giving’s end-to-end financial solutions for corporate social responsibility, digital giving by individuals, and investing options that align with many interests and values. Uncommon Investments was created to build and make investable ideas that promote the company’s mission and provide a platform for unique partners.
“Uncommon and Portfolio Design Advisors share the same values and an outcome-oriented approach to how money is invested and then utilized. PDA approaches the markets from a ‘client first’ perspective, and we are proud to help them take their work to a wider audience,” added Pileggi. “The markets should expect more of our proprietary products, very soon.”
An Uncommon Impact
As far as navigating today’s equity market, Pileggi continued: “Some make a strong argument that this is the right moment for investors to revisit their risk tolerance and their portfolio allocation. We have had the tremendous upward impact of global Central Bank stimulus, unprecedented fiscal (and debt financed) spending, and an expected ‘Roaring 20’s’ for non-tech stocks that have boomed in recent months. There has been a great deal of margin and debt financed stock buys, and with platforms like Robinhood, seemingly no barriers to anyone buying stock for its own sake. Fundamentals are seemingly less important than at any time since perhaps the dot com boom. A sovereign crisis anywhere in the world or another pandemic shock could trigger the kind of volatility we witnessed in the spring of 2020. Yet, the opportunity cost of not being invested carries its own risks. All in all, not a simple time for self-directed or professional investors.”
Finally, in looking at the long-term goal for UGCE, Pileggi concluded: “Obviously, Uncommon Investment Advisors has no delusions of entering the upper ranks of global asset managers. Our mission is well defined, supporting the goals and objectives of Uncommon Giving Corp. with selected proprietary products built in partnership with quality firms, like Portfolio Design Advisors. Our goal is to ably and professionally provide clients with asset class exposure that comports with their objectives and desired outcomes. UGCE, we believe, is a great product for a small investor or donor who wants efficient access to well-established brands and firms with both growth and value characteristics. If you look at the other product that is in the same Trust as UGCE, you will see more fabulous partners and a unique approach to index construction. But that is a later story. Right now, we are thrilled to offer UGCE.”
Uncommon Portfolio Design Core Equity Fund details can be found at www.uncommonetfs.com.