GMO, whose first exchange-traded fund recently topped $1 billion in assets, plans to offer five new actively managed ETFs, a filing with the Securities and Exchange Commission shows.
The firm, co-founded by legendary investor Jeremy Grantham, plans to offer the GMO International Quality ETF, the GMO International Value ETF, the GMO U.S. Value ETF, the GMO Beyond China ETF and the GMO Systematic Investment Grade Credit ETF, the Aug. 14 filing shows.
GMO said on Aug. 12 that the GMO U.S. Quality ETF, which was launched in November and is known by the ticker symbol QLTY, had surpassed $1 billion in assets. QLTY has returned nearly 17% this year through Aug. 14, outpacing the 13% return of its large blend category peers, according to Morningstar.
“GMO traditionally markets to institutional investors, so ETFs have been a bit of a pivot for them,” said Bryan Armour, director of passive strategies research for North America at Morningstar Research Services, a Morningstar subsidiary, in an email. “So far, it’s paid off for the $1.1 billion QLTY.”
GMO is likely looking to “take that success abroad with an international quality ETF, while also tapping into their contrarian roots by launching international value and emerging markets ex-China ETFs,” Armour said.
“I expect these ETFs will build off of existing GMO mutual funds and institutional strategies,” he said, adding that launching international strategies “meshes with GMO's current seven-year return forecast, which predicts foreign markets will outperform domestic.”
Armour also noted the growing popularity of active ETFs.
“GMO appears poised to benefit from the growing popularity of active ETFs,” he said, adding that active ETFs have accounted for $152 billion — or about 30% — of the $528 billion that has flowed into U.S.-listed ETFs this year through July 31.
In an emailed statement, GMO said it has always been committed to offering investment solutions in the structures that best address the needs of its clients.
“Expanding our ETF suite is a continued evolution of that commitment, driven by demand from intermediary and wealth management investors,” GMO said. “We are excited to be making our strategies available to a growing group of investors, many of whom have not been able to access GMO previously.”
Established in 1977, GMO, a global investment manager, had assets under management totaling $66 billion as of June 30, according to the news release.
