CEO and Founder, Summit Global Investments (SGI)
This week we sit down with David Harden at SGI to discuss the company’s views and support of the active ETF market.
Summit Global Investments (SGI) has long been a mutual fund and separately managed account (SMA) manager serving institutions, RIAs, family offices and individual investors using its “Managed Risk Approach.” What led to the decision to enter the active ETF market in 2023?
As an investment manager we strongly felt that now is the right time to have a core ETF that incorporates downside risk management for investors. We also believe that the best vehicle to allow investors this core exposure and actively managed investments is an ETF. ETFs provide the opportunity to have greater cost efficiency, liquidity and flexibility (ETFs trade throughout the trading day – providing investors with flexibility to enter or exit positions quickly, unlike mutual funds that are typically priced and traded once per day) and tax efficiency (ETFs have a unique creation and redemption process, which helps minimize capital gains distributions and may reduce tax liabilities). In addition, ETFs are easily accessible through brokerage accounts, making them quickly available to investors.
While separately managed accounts (SMAs) and mutual funds have their own advantages, we believe launching our active semi-transparent ETFs helps investors have the best of both worlds.
SGI is unique in offering active ETFs that allow an asset manager the flexibility to protect their valued research perspectives. Why did you choose to license both the NYSE Active Proxy Structure and the Blue Tractor Shielded Alpha ETF wrapper?
Both wrappers have advantages and disadvantages. Understanding these helps us put the best strategy in the most effective structure/wrapper. With both wrappers, we seek to provide liquidity and transparency to the ETF community that further benefits investors with small bid/ask spreads and trading efficiency coupled with protecting investors through our unique managed risk approach to investing. With the Blue Tractor and NYSE wrapper/structure we are able to align and tailor our investments to the expectations and advantages of each while minimizing or eliminating the disadvantages.
As an asset manager, what benefits and/or nuances come with operating an active ETF product line-up compared to other investment wrappers (i.e., mutual funds, CITs, etc.)?
ETFs provide the opportunity to have greater cost efficiency, liquidity and flexibility (ETFs trade throughout the trading day – providing investors with flexibility to enter or exit positions quickly, unlike mutual funds that are typically priced and traded once per day) and tax efficiency (ETFs have a unique creation and redemption process, which helps minimize capital gains distributions and may reduce tax liabilities). In addition, ETFs are easily accessible through brokerage accounts, making them quickly available to investors.
While other investment wrappers (separately managed accounts, mutual funds, etc.) have their own advantages, we believe launching our active semi-transparent ETF helps investors have the best of both worlds.
What are the key considerations investors should contemplate when considering actively managed ETFs?
Investors may want to consider several factors when researching an actively managed ETF. Beyond whether the style, strategy and risk the ETF may provide and how the specific strategy incorporates an investor’s objectives, goals and risk tolerance, other factors may include how the philosophy and ability of the manager intertwine with those of the investor. Does the investor care about long-term over short-term or up market versus down market protection? Does the investment managers approach make sense or is it clear to an investor? Lastly, how does the approach resonate or how is it incorporated by the investor?
What guidance would you provide sponsors as they consider expanding their product offerings to include actively managed ETFs?
ETFs have various phases and connection points. Behind the scenes makes a difference. Partnerships make a difference. The liquidity of the ETF and spread (the variable between the bid and ask each investor will have to ‘hurdle’ or substrate from any potential gain). These factors and others that must and do occur within the connection points of the ‘day in the life’ of an ETF make it critical that ETF investment managers partner with the best and use principles of diversification when considering exchanges, structures, APs, Market Makers, traders, etc. (the ETF community) to help ensure investors win.
| Firms | |||
|---|---|---|---|
| # of Issuers | 232 | ||
| # of New Issuers 2023 | 22 | ||
| Products | Assets | ||
| # of ETFs | 1052 | AUM ($B) | $393.16 |
| # of New Launches 2023 | 97 | 3 Yr AUM CAGR | 55% |
| Avg. ER | 0.44% | 5 Yr AUM CAGR | 49% |
| Cash Flow | Trading | ||
| YTD Cash Flow ($B) | $26.52 | YTD ADV (Shares) | 128,789,325 |
| 3 Yr Cash Flow | $254.52 | YTD ADV ($) | $4.23 B |
| 5 Yr Cash Flow | $315.34 | YTD Avg. Spread (bps)* | 31.17 |
Source: Factset & NYSE Internal Database and Consolidated Tape Statistics as of 5/19/2023
*Simple average
| Ticker | Inception | Name | AUM | YTD Flows | 30 Day Median Spread (bps) | ADV (shares) | Structure | LMM | Expense Ratio | Listing Venue |
|---|---|---|---|---|---|---|---|---|---|---|
| EQOP | 9/17/20 | Natixis U.S. Equity Opportunities ETF | $9,697,220 | $243,311 | 14.62 | 50 | NYSE AMS | Citadel | 0.85% | NYSE |
| VNSE | 9/17/20 | Natixis Vaughan Nelson Select ETF | $29,314,365 | $15,178,579 | 14.06 | 8,752 | NYSE AMS | Citadel | 0.80% | NYSE |
| VNMC | 9/17/20 | Natixis Vaughan Nelson Mid Cap ETF | $7,516,785 | $289,302 | 14.03 | 164 | NYSE AMS | Citadel | 0.85% | NYSE |
| ESGA | 7/15/20 | American Century Sustainable Equity ETF | $122,014,600 | $3,496,074 | 14.09 | 4,269 | NYSE AMS | Citadel | 0.39% | NYSE |
| MID.ETF | 7/15/20 | American Century Mid Cap Growth Impact ETF | $37,588,190 | $7,660,026 | 12.68 | 3,381 | NYSE AMS | Citadel | 0.45% | NYSE |
| ESGY | 7/1/21 | American Century Sustainable Growth ETF | $7,744,060 | $336,361 | 10.75 | 473 | NYSE AMS | Citadel | 0.39% | NYSE |
| NDVG | 8/5/21 | Nuveen Dividend Growth ETF | $8,128,896 | $250,321 | 8.41 | 274 | NYSE AMS | Citadel | 0.64% | NYSE |
| NSCS | 8/5/21 | Nuveen Small Cap Select ETF | $5,510,648 | $0 | 11.31 | 57 | NYSE AMS | Citadel | 0.85% | NYSE |
| NWLG | 8/5/21 | Nuveen Winslow Large-Cap Growth ESG ETF | $5,381,225 | $188,861 | 9.25 | 170 | NYSE AMS | Citadel | 0.64% | NYSE |
| NUGO | 9/28/21 | Nuveen Growth Opportunities ETF | $2,617,444,892 | $114,629,771 | 9.08 | 124,545 | NYSE AMS | Citadel | 0.55% | NYSE |
| SAEF | 11/16/21 | Schwab Ariel ESG ETF | $14,588,000 | $1,157,400 | 37.98 | 2,023 | NYSE AMS | Flow Traders | 0.59% | NYSE |
| IWLG | 6/23/22 | IQ Winslow Large Cap Growth ETF | $19,518,850 | $3,717,510 | 22.70 | 1,450 | NYSE AMS | Citadel | 0.60% | NYSE |
| IWFG | 6/23/22 | IQ Winslow Focused Large Cap Growth ETF | $6,404,580 | $0 | 22.96 | 150 | NYSE AMS | Citadel | 0.65% | NYSE |
| TSME | 10/5/22 | Thrivent Small-Mid Cap ESG ETF | $126,411,003 | $58,368,212 | 9.69 | 23,466 | NYSE AMS | RBC | 0.65% | NYSE |
| JPSV | 3/8/23 | JPMorgan Active Small Cap Value ETF | $10,357,600 | $957,350 | 9.68 | 1,025 | NYSE AMS | Citadel | 0.74% | NYSE |
| FDG | 4/2/20 | American Century Focused Dynamic Growth ETF | $147,486,663 | $3,928,501 | 10.65 | 6,970 | ActiveShares | Citadel | 0.45% | Cboe BZX |
| FLV | 4/2/20 | American Century Focused Large Cap Value ETF | $226,889,388 | $6,771,616 | 10.18 | 8,282 | ActiveShares | Citadel | 0.42% | Cboe BZX |
| FBCG | 6/4/20 | Fidelity Blue Chip Growth ETF | $541,890,000 | $47,389,614 | 29.15 | 102,585 | Fidelity Proxy | GTS | 0.59% | Cboe BZX |
| FBCV | 6/4/20 | Fidelity Blue Chip Value ETF | $130,617,400 | -$3,350,396 | 25.63 | 17,578 | Fidelity Proxy | GTS | 0.59% | Cboe BZX |
| FMIL | 6/4/20 | Fidelity New Millennium ETF | $88,915,180 | -$798,868 | 22.87 | 12,506 | Fidelity Proxy | GTS | 0.59% | Cboe BZX |
| FGRO | 2/4/21 | Fidelity Growth Opportunities ETF | $153,411,510 | $76,307,335 | 16.33 | 91,416 | Fidelity Proxy | Citadel | 0.59% | Cboe BZX |
| FMAG | 2/4/21 | Fidelity Magellan ETF | $45,952,035 | $40,271 | 11.13 | 8,216 | Fidelity Proxy | RBC | 0.59% | Cboe BZX |
| FPRO | 2/4/21 | Fidelity Real Estate Investment ETF | $14,440,550 | -$2,050,746 | 12.51 | 3,212 | Fidelity Proxy | Citadel | 0.59% | Cboe BZX |
| FSMO | 2/4/21 | Fidelity Small/Mid-Cap Opportunities ETF | $30,190,153 | $2,218,239 | 8.96 | 4,967 | Fidelity Proxy | RBC | 0.59% | Cboe BZX |
| FSST | 6/17/21 | Fidelity Sustainability U.S. Equity ETF | $8,940,645 | $952,512 | 11.40 | 1,403 | Fidelity Proxy | RBC | 0.59% | NYSE |
| FDWM | 6/17/21 | Fidelity Women's Leadership ETF | $2,687,400 | -$93,250 | 13.38 | 1,501 | Fidelity Proxy | RBC | 0.59% | NYSE |
| TCHP | 8/5/20 | T. Rowe Price Blue Chip Growth ETF | $338,876,459 | $12,584,131 | 9.81 | 101,222 | T Rowe Proxy | Virtu | 0.57% | NYSE |
| TDVG | 8/5/20 | T. Rowe Price Dividend Growth ETF | $334,996,524 | $57,848,175 | 8.82 | 49,092 | T Rowe Proxy | RBC | 0.50% | NYSE |
| TEQI | 8/5/20 | T. Rowe Price Equity Income ETF | $99,801,330 | $4,896,815 | 10.56 | 13,732 | T Rowe Proxy | Virtu | 0.54% | NYSE |
| TGRW | 8/5/20 | T. Rowe Price Growth Stock ETF | $46,216,357 | $2,443,526 | 10.09 | 6,513 | T Rowe Proxy | RBC | 0.52% | NYSE |
| TSPA | 6/8/21 | T. Rowe Price U.S. Equity Research ETF | $26,310,557 | $498,267 | 9.60 | 2,992 | T Rowe Proxy | RBC | 0.52% | NYSE |
| IVRA | 12/22/20 | Invesco Real Assets ESG ETF | $2,979,663 | $0 | 40.09 | 849 | Fidelity Proxy | Citadel | 0.59% | Cboe BZX |
| LOPP | 2/1/21 | Gabelli Love Our Planet & People ETF | $12,053,220 | -$603,375 | 32.62 | 260 | ActiveShares | GTS | 0.90% | NYSE |
| GGRW | 2/16/21 | Gabelli Growth Innovators ETF | $2,480,800 | $0 | 48.89 | 87 | ActiveShares | GTS | 0.90% | NYSE |
| GAST | 1/5/22 | Gabelli Asset ETF | $4,630,500 | $0 | 36.83 | 16 | ActiveShares | GTS | 0.90% | NYSE |
| GABF | 5/11/22 | Gabelli Financial Services Opportunities ETF | $6,027,300 | $414,975 | 28.81 | 290 | ActiveShares | GTS | 0.00% | NYSE |
| GCAD | 1/3/23 | Gabelli Commercial Aerospace & Defense ETF | $3,802,305 | $1,391,375 | 24.67 | 753 | ActiveShares | GTS | 0.90% | NYSE |
| FRTY | 3/1/21 | Alger Mid Cap 40 ETF | $25,667,750 | -$4,655,750 | 49.93 | 10,847 | ActiveShares | Virtu | 0.60% | NYSE |
| ATFV | 5/4/21 | Alger 35 ETF | $9,942,750 | -$181,000 | 64.05 | 265 | ActiveShares | Virtu | 0.55% | NYSE |
| AWEG | 3/7/23 | Alger Weatherbie Enduring Growth ETF | $3,978,000 | $2,826,625 | 68.47 | 3,790 | ActiveShares | Virtu | 0.65% | NYSE |
| CLIA | 5/9/23 | Veridien Climate Action ETF | $2,056,070 | $1,999,980 | 35.27 | 26,305 | ActiveShares | GTS | 0.85% | NYSE |
| REIT | 2/26/21 | ALPS Active REIT ETF | $17,767,547 | $862,550 | 33.91 | 3,281 | Blue Tractor | GTS | 0.68% | NASDAQ |
| STNC | 3/16/21 | Hennessy Stance ESG Large Cap ETF | $45,280,733 | $1,460,834 | 11.83 | 2,595 | Blue Tractor | GTS | 0.85% | NYSE |
| PFUT | 5/26/21 | Putnam Sustainable Future ETF | $157,632,784 | $149,247,193 | 30.55 | 9,451 | Fidelity Proxy | Virtu | 0.64% | NYSE |
| PLDR | 5/26/21 | Putnam Sustainable Leaders ETF | $352,730,817 | $336,054,900 | 10.26 | 169,544 | Fidelity Proxy | RBC | 0.59% | NYSE |
| PGRO | 5/26/21 | Putnam Focused Large Cap Growth ETF | $29,726,400 | $16,265,646 | 9.26 | 10,065 | Fidelity Proxy | RBC | 0.55% | NYSE |
| PVAL | 5/26/21 | Putnam Focused Large Cap Value ETF | $157,203,392 | $20,263,434 | 28.46 | 23,121 | Fidelity Proxy | Virtu | 0.55% | NYSE |
| HFGO | 11/9/21 | Hartford Large Cap Growth ETF | $87,829,020 | -$333,090 | 30.12 | 1,390 | Fidelity Proxy | Citadel | 0.59% | Cboe BZX |
| SEMI | 3/30/22 | Columbia Seligman Semiconductor and Technology ETF | $18,525,926 | $1,786,925 | 29.16 | 2,269 | Fidelity Proxy | Virtu | 0.75% | NYSE |
| CAPE | 4/5/22 | DoubleLine Shiller CAPE U.S. Equities ETF | $249,415,440 | $22,938,800 | 14.80 | 42,869 | ActiveShares | Citadel | 0.65% | NYSE |
| FMCX | 4/25/22 | FMC Excelsior Focus Equity ETF | $75,516,900 | -$289,400 | 17.24 | 312 | ActiveShares | GTS | 0.70% | NYSE |
| BYRE | 5/19/22 | Principal Real Estate Active Opportunities ETF | $4,858,304 | $0 | 25.86 | 329 | Fidelity Proxy | Virtu | 0.65% | NYSE |
| Total/Average | $6,535,348,684 | $965,509,442 | 21.41 | 911,122 | 0.63% |
Source: Factset & NYSE Internal Database and Consolidated Tape Statistics as of 5/19/2023
*Simple average
| Ticker | Name | Issuer | Launch Date | Asset Class | AUM |
|---|---|---|---|---|---|
| APRD | Innovator Premium Income 10 Barrier ETF - April | Innovator | 4/3/23 | Asset Allocation | $4,349,625 |
| APRH | Innovator Premium Income 20 Barrier ETF - April | Innovator | 4/3/23 | Asset Allocation | $24,750,000 |
| APRJ | Innovator Premium Income 30 Barrier ETF - April | Innovator | 4/3/23 | Asset Allocation | $37,667,500 |
| APRQ | Innovator Premium Income 40 Barrier ETF - April | Innovator | 4/3/23 | Asset Allocation | $32,017,570 |
| DMBS | DoubleLine Mortgage ETF | DoubleLine | 4/4/23 | Fixed Income | $50,335,825 |
| DCMB | DoubleLine Commercial Real Estate ETF | DoubleLine | 4/4/23 | Fixed Income | $26,182,050 |
| BIGT | Roundhill BIG Tech ETF | Roundhill | 4/11/23 | Equity | $2,784,220 |
| LZRD | Parabla Innovation ETF | Parabla | 4/11/23 | Equity | $583,500 |
| MKAM | MKAM ETF | MKAM | 4/12/23 | Asset Allocation | $3,537,030 |
| BTR | Beacon Tactical Risk ETF | Beacon Capital Management | 4/18/23 | Asset Allocation | $4,495,500 |
| BSR | Beacon Selective Risk ETF | Beacon Capital Management | 4/18/23 | Asset Allocation | $4,269,040 |
| APLY | YieldMax AAPL Option Income Strategy ETF | YieldMax | 4/18/23 | Equity | $5,307,500 |
| ZIVB | -1x Short VIX Mid-Term Futures Strategy ETF | Volatility Shares | 4/19/23 | Alternatives | $1,486,000 |
| FDAT | Tactical Advantage ETF | Family Dynasty Advisors | 4/20/23 | Asset Allocation | $4,474,125 |
| GAPR | FT Cboe Vest U.S. Equity Moderate Buffer ETF - April | FT Cboe Vest | 4/24/23 | Equity | $189,315,060 |
| MDLV | Morgan Dempsey Large Cap Value ETF | Morgan Dempsey | 4/26/23 | Equity | $8,628,588 |
| DOGG | FT Cboe Vest DJIA Dogs 10 Target Income ETF | FT Cboe Vest | 4/27/23 | Equity | $1,974,039 |
| QWST | Harbor Small Cap Explorer ETF | Harbor | 4/27/23 | Equity | $9,243,000 |
| MAYT | AllianzIM U.S. Large Cap Buffer10 May ETF | Allianz Investment Management | 5/1/23 | Equity | $35,845,163 |
| MAYW | AllianzIM U.S. Large Cap Buffer20 May ETF | Allianz Investment Management | 5/1/23 | Equity | $71,676,930 |
| HEAT | Touchstone Climate Transition ETF | Touchstone Investments | 5/2/23 | Equity | $10,825,813 |
| APCB | ActivePassive Core Bond ETF | Envestnet | 5/3/23 | Fixed Income | $91,614,920 |
| APMU | ActivePassive Intermediate Municipal Bond ETF | Envestnet | 5/3/23 | Fixed Income | $28,855,298 |
| APIE | ActivePassive International Equity ETF | Envestnet | 5/3/23 | Equity | $66,974,778 |
| APUE | ActivePassive U.S. Equity ETF | Envestnet | 5/3/23 | Equity | $149,079,430 |
| USE | USCF Energy Commodity Strategy Absolute Return Fund | USCF | 5/4/23 | Alternatives | $3,161,910 |
| CLIA | Veridien Climate Action ETF | Veridien | 5/9/23 | Equity | $2,054,330 |
| IQRA | IQ CBRE Real Assets ETF | IndexIQ | 5/10/23 | Equity | $4,874,140 |
| CMDT | PIMCO Commodity Strategy Active Exchange-Traded Fund | PIMCO | 5/10/23 | Commodities | $6,142,300 |
| TOLL | Tema Monopolies and Oligopolies ETF | Tema | 5/11/23 | Equity | $3,557,064 |
| BDGS | Bridges Capital Tactical ETF | Bridges | 5/11/23 | Equity | $11,610,400 |
| NVDY | YieldMax NVDA Option Income Strategy ETF | YieldMax | 5/11/23 | Equity | $1,063,000 |
| RSHO | Tema American Reshoring ETF | Tema | 5/11/23 | Equity | $2,564,370 |
| LUX | Tema Luxury ETF | Tema | 5/11/23 | Equity | $1,761,739 |
| BKIV | BNY Mellon Innovators ETF | BNY Mellon | 5/17/23 | Equity | $10,270,466 |
| BKWO | BNY Mellon Women's Opportunities ETF | BNY Mellon | 5/17/23 | Equity | $10,196,945 |
| ZTAX | X-Square Municipal Income Tax Free ETF | X-Square | 5/19/23 | Fixed Income | $1,233,200 |
| PEMX | Putnam Emerging Markets ex-China ETF | Putnam | 5/18/23 | Equity | $6,070,515 |
| ECML | Euclidean Fundamental Value ETF | Euclidean | 5/18/23 | Equity | $135,759,428 |
| CHAT | Roundhill Generative AI & Technology ETF | Roundhill | 5/18/23 | Equity | $1,928,625 |
| HYFI | AB High Yield ETF | AllianceBernstein | 5/15/23 | Fixed Income | $66,704,468 |
| EMM | Global X Emerging Markets ETF | Global X | 5/15/23 | Equity | $22,415,963 |
| EMC | Global X Emerging Markets Great Consumer ETF | Global X | 5/15/23 | Equity | $369,097,577 |
| Total - 43 New ETFs | Total | $1,526,738,945 |
Source: Factset as of 5/19/2023
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