First Manhattan debuts focused US equity ETF

Apr 27th, 2022 | By | Category: Equities

First Manhattan, a New York City-based investment advisor overseeing more than $20 billion in assets, has debuted its first ETF.

Zachary Wydra, CEO of First Manhattan

Zachary Wydra, CEO of First Manhattan.

The FMC Excelsior Focus Equity ETF (FMCX US) offers exposure to an actively managed portfolio of US equities selected based on First Manhattan’s highest-conviction ideas.

The fund harnesses the firm’s six decades of fundamentals-based, bottom-up research to select stocks of companies with durable competitive advantages, high-quality earnings, strong management teams, robust governance practices, and attractive cash reinvestment opportunities.

The portfolio typically consists of just 25 to 30 holdings weighted by conviction while capping any single stock at 10%. Selected constituents are treated as long-term holdings, and portfolio turnover is thus expected to be relatively low.

The ETF utilizes Precidian Investments’ semi-transparent ETF structure, branded ‘ActiveShares’, to shield daily portfolio holdings and prevent the risk of front-running.

The fund has been listed on NYSE Arca with an expense ratio of 0.70%. Distributions are sent to investors on a quarterly basis.

Commenting on the launch, Zachary Wydra, CEO of First Manhattan, said: “We are excited to strategically expand First Manhattan’s product offering with the launch of our very first active ETF. Over the past six decades, we have honed a distinctive, fundamentals-based investment approach, and we are compelled to offer this strategy to a broad range of institutional and retail investors in the form of an innovative ETF.”

Himayani Puri, Portfolio Manager and Director of Research at First Manhattan, added: “We will continue to apply our distinctive investment process to identify opportunities in companies that are attractively valued relative to the quality of their business, our view of their earnings trajectory, and our expectation for long-term growth in value-per-share. We have a business owner’s mindset and engage extensively with management teams.”

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