(Bloomberg) -- Another Wall Street sell-side research firm is looking to make inroads into the ETF world — this time with actively managed quant funds.
On Tuesday, the two firms are launching the Simplify Wolfe US Equity 150/50 ETF under the ticker WUSA, and have plans to launch additional funds, including the Simplify Wolfe Alpha Capture ETF, the Simplify Wolfe Market Neutral SHIELD ETF and the Simplify Wolfe Market Neutral Quality ETF.
WUSA is made up of long and short exposure to a number of US stocks, with a proprietary machine-learning algorithm analyzing and identifying the investments, according to a press release. It takes long positions in about 250 equities and short positions in roughly 150.
“Within our institutional client base, we’ve created different types of hedging products and exposures where clients are able to leverage our research work within their own investment process,” said Wolfe’s Mackenzie Fulk. “Partnering with Simplify now allows us to do something similar for investors who are seeking alternative exposures that had historically only been available to institutional investors.”
The launch is part of a popular trend of strategists, research shops and big-name money managers putting their weight behind ETFs, the hottest investment space on Wall Street, and one that’s attracting billions of dollars from both retail and institutional clients. Economist Nouriel Roubini, Fundstrat’s Tom Lee and most recently Rob Arnott of Research Affiliates are just a few of those who have attached their names to the wrapper or have expressed the desire to create their own funds.
Before Tuesday’s launch, Simplify had 30 funds under its lineup listed on its website; it manages roughly $6 billion. Though Wolfe is a subadviser on the Simplify Market Neutral Long/Short ETF (ticker EQLS), WUSA is the first to bear the company’s name. EQLS’s portfolio is composed with help from a proprietary machine-learning stock-picking model that was developed by Wolfe.
Wolfe, meanwhile, has a team of more than 30 analysts covering more than 750 companies, according to its website. Yin Luo, a former Deutsche Bank quant, leads the team that’s responsible for the company’s quantitative research work.
“If I’m them, I’m viewing this as an opportunity to diversify their business lines. And ETFs are a growing segment within asset management, so any firm with a provocative solution should want to be a part of that,” said Todd Sohn, an ETF strategist at Strategas, an industry competitor that has its own ETFs as well. “They are also going the route of partnering with a firm with established ETF roots, which can be less of a hurdle than starting from scratch.”
--With assistance from Justina Lee.
©2024 Bloomberg L.P.
