Thematic Investing, Single Treasury Bond ETFs, & Private Equity

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On this episode of ETF Prime, host Nate Geraci speaks with four individuals discussing several different ETF-related topics. His guests include VettaFi’sTom Hendrickson and Jane Edmondson, who discuss EQM Indexes and thematic investing. Geraci also speaks with F/m Investments’ Alex Morris, who talks about his firm pursuing a mutual fund share class. To close the podcast, Geraci speaks with Vanguard’s Rich Powers about private equity, and what it offers investors.

EQM Indexes

To open the podcast, Geraci brings on VettaFi’s Tom Hendrickson and Jane Edmondson, who discuss the firm’s recent acquisition of EQM Indexes. Geraci begins the conversation by pointing out several of the index’s achievements. These include giving examples of funds like the Amplify Online Retail ETF (IBUY) and the GraniteShares HIPS US High Income ETF (HIPS) as examples of funds that the index powers. Geraci then asks Hendrickson what ultimately led to VettaFi wanting to acquire EQM Indexes.

“At VettaFi, we think about people and capabilities that add to our mission,” said Hendrickson when answering what made EQM attractive to VettaFi.

Hendrickson then goes in-depth into several other reasons VettaFi acquired this index, including the index’s closely aligned values to those practiced daily at VettaFi. He also highlighted that Edmondson’s experience and EQM’s capability in the thematic space is something that was attractive to the firm. To close the segment, Edmondson highlights her journey in the financial world, and how EQM Indexes came about. She also gives her thoughts on the firm joining VettaFi, and what it will mean for EQM Indexes.

Thematic Investing

The conversation then shifts gears when Geraci asks for both Edmondson’s and Hendrickson’s thoughts on the thematic investment space. Edmondson sets the table for the conversation by discussing what the current environment is for thematic investing, and why investors seem to currently be interested in this asset class.

“The popularity is really here to stay. One of the reasons for that is investors don’t really think in terms of style boxes. But they understand investment themes,” said Edmondson.

She highlights how this is very true for today’s younger investors. Edmondson also points out how many investors have become much more comfortable with this style of investing, and reiterates that she believes its popularity will continue. Hendrickson adds that thematic investing is another great example of how much access ETFs can give investors to specific industries they are looking to invest in. The group then closed the segment by providing their thoughts on the future of thematic investing.

Mutual Fund Share Class

Geraci then brings on F/m Investments’ Alex Morris, who is the president and chief investment officer of the firm. The issuer currently offers 11 ETFs and has over $3 billion in assets in a little over a year in existence. F/m Investments also launched the industry’s first single-bond ETF, and Geraci points to the US Treasury 3 Month Bill ETF (TBIL) as an example of this. He also highlights that the firm recently filed for a mutual fund share class of all their ETFs. Morris joins the conversation by discussing that the past year for his firm has been extremely exciting. He mentions that the products they are currently offering were met with open arms by investors in the past year. Geraci then asks Morris about this recent share class filing.

“Our interests are a little different [than other firms when]we looked at the issues in running a mutual fund ETF multishare-class model,” said Morris.

Morris then goes on to explain some of the issues commonly seen within this model. He feels that his firm’s products could solve some of the problems investors are dealing with. One of F/m Investment’s goals is to gain access to 401(k)s and other accounts. In addition, the pair go on to discuss the intricacies of the filing, as well as some of the firm’s other ETF offerings, and more.

Private Equity

To close the podcast, Geraci brings on Vanguard’s Rich Powers, head of private equity products for the firm. Geraci highlights how many individuals are familiar with Vanguard’s ETF suite. However, many may not be as familiar with the firm’s private equity side. Powers highlights that Vanguard has been looking to get into the private equity space for several years to give its clients access to this asset class. The firm partnered with HarbourVest to build a product to give clients access to private equity to improve investment outcomes.

“What we are trying to deliver with this product is a turnkey solution,” said Powers.

He then goes into how the product works, and who it is available to. To close the segment, Powers discusses HarbourVest, and what benefits private equity can offer investors.