Hotchkis & Wiley has launched its first actively managed exchange-traded fund, the Hotchkis & Wiley SMID-Cap Diversified Value Fund, which trades under the ticker HWSM.
HWSM began trading March 31, said a news release April 8.
The ETF seeks to “exploit valuation anomalies in the small and midcap equity market, an area often underfollowed by Wall Street research,” the news release said.
The ETF will typically hold between 150 and 200 stocks of undervalued small- and medium-sized companies with strong businesses, robust balance sheets and prudent governance. Companies in the portfolio will have market caps ranging from $2 billion to $50 billion.
“Our approach is built on identifying undervalued companies with strong fundamentals that are often overlooked,” said Ryan Thomes, co-portfolio manager of HWSM, in the release. “By combining our proprietary quantitative tools with the expertise of our research team, we aim to deliver a portfolio that captures the intrinsic value of these businesses.”
Judd Peters is co-manager of the ETF.
A Hotchkis spokesperson said that while the ETF is a new strategy not offered in a mutual fund, it is similar in approach and managed by the same investment team as the Hotchkis & Wiley Small Cap Diversified Value Fund, which trades under the ticker HWVIX and has about $812 million in assets under management.
As of April 7, the ETF had about $1 million in AUM and carries an expense ratio of 0.55%, according to the firm’s website.
Hotchkis & Wiley manages a total of $33 billion in actively managed equity and fixed-income portfolios.
