Financial planning firm USAA has stepped into the ETF arena, launching a suite of core investment strategies to provide actively managed fixed income and smart beta equity strategies to its clients and investors.
On Thursday, USAA rolled out two actively managed bond ETFs and four smart beta stock ETFs, including:
- USAA Core Short-Term Bond ETF (NYSEArca: USTB): net expense ratio 0.35%
- USAA Core Intermediate-Term Bond ETF (NYSEArca: UITB): net expense ratio 0.40%
- USAA MSCI USA Value Momentum Blend Index ETF (NYSEArca: ULVM): net expense ratio 0.20%
- USAA MSCI USA Small Cap Value Momentum Blend Index ETF (NYSEArca: USVM): net expense ratio 0.25%
- USAA MSCI International Value Momentum Blend Index ETF (NYSEArca: UIVM): net expense ratio 0.35%
- USAA MSCI Emerging Markets Value Momentum Blend Index ETF (NYSEArca: UEVM): net expense ratio 0.45%
The new suite of ETFs are built as core portfolio-building components and allow investors more choices at a competitive cost.
The new USAA ETFs “provide clients with core building blocks,” Lance Humphrey, executive director of global multi-assets at USAA Asset Management Co., told ETF Trends in a call. “The ETFs help build a low-cost global portfolio, leveraging USAA’s strategy that we have built over the years.”
For example, the new actively managed fixed income ETFs incorporate USAA’s decades of experience in Core Bond categories, with the USAA Core Intermediate-Term Bond ETF focusing on high current income without undue risk to principal and the USAA Core Short-Term Bond ETF targeting high current income consistent with preservation of capital.
Meanwhile, the new smart beta lineup focuses on the value and momentum factors, identifying stocks with attractive valuations and positive price momentum and weighting the two factors in such a way to help investors diversify against the risk of individual holdings.
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USAA has been a major institutional investor of ETFs. For instance, USAA was a major contributing factor to the rapid growth of the Goldman Sachs’ suite of smart beta ETFs as recent filings show USAA held hundreds of millions of dollars in Goldman’s ActiveBeta line. The firm has also developed a strong base in the fixed income space for more than four decades.
“At USAA, we continually strive to meet our members’ needs and help them achieve their financial goals. We’ve had a long and successful history offering marketplace ETFs and currently have more than $5 billion invested in third party ETFs through multiple asset classes,” John Spear, Chief Investment Officer, USAA Mutual Funds, said in a note. “When you add our core competency of active fixed income fund management and track record providing smart beta strategies, it was a logical next step to offer USAA-branded ETFs to complement our investment solutions and help our members prepare for their financial future.”
For more information on new fund products, visit our new ETFs category.