Virtus ETF Solutions has partnered up with Wellington Management to launch an actively managed ETF to help investors gain long-term global market exposure through various market conditions.
Virtus Investment Partners rolled out the Virtus WMC Global Factor Opportunities ETF (NYSEArca: VGFO), which comes with a 0.49% expense ratio.
The actively managed ETF is managed by Wellington’s Gregg R. Thomas, Senior Managing Director and Associate Director of Investment Strategy and Risk, and Thomas S. Simon, Managing Director and Director of Equity Risk Management and Investment Strategy and Risk.
“This new relationship allows Virtus to leverage Wellington Management’s proprietary, independent research and vast expertise in global equities, as well as its advanced risk management platform, to structure a portfolio that adapts to an evolving economic climate,” William J. Smalley, executive managing director and head of product strategy and management, Virtus ETF Solutions, said in a note.
The Virtus WMC Global Factor Opportunities ETF will try to achieve capital appreciation by trying to outperform the global equity market over a full market cycle with comparable level of risk, according to a prospectus sheet.
Wellington Management Company portfolio managers will employ a proprietary, multi-factor approach based on quantitative and qualitative research and analysis. They will identify investment opportunities by region and, within each region, allocate to equity securities that the managers believe share complementary factors.
The factors are characteristics that are important in explaining the returns and risks of a group of securities, including: mean reversion or stocks that are inexpensive relative to their historical prices; trend following or strong momentum and higher growth potential; risk aversion or financially healthy, stable, and lower volatility companies; and risk seeking or stocks that may be higher volatility.
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The active ETF will have exposure to at least five different countries and invest at least 30% of assets of companies outside the U.S.
“The dynamic, multi-factor approach combines the benefits of smart beta and active risk management, representing the next generation of factor investing,” Smalley said. “VGFO allows investors who use smart beta in their portfolios to outsource the factor allocation decision-making to Wellington Management, a highly respected firm whose capabilities span nearly all segments of the global capital markets.”
Current top holdings include Wal-Mart 1.5%, Citigroup 1.1%, Cisco Systems 1.0%, Travelers Cos 0.8%, Gilead Sciences 0.8%, Aflac 0.8%, Johnson & Johnson 0.8%, Nestle SA 0.8%, Fortis 0.7% and Royal Bank of Canada 0.7%.
For more information on new fund products, visit our new ETFs category.