SEI debuts factor-based US equity ETFs

May 25th, 2022 | By | Category: Equities

SEI Investments, a Pennsylvania-headquartered financial services company with over $1 trillion in assets under management or administration, has launched its first ETFs.

Kevin Barr, Head of SEI's Investment Management Unit

Kevin Barr, Head of SEI’s Investment Management Unit.

Debuting on Cboe BZX Exchange, SEI’s initial suite of ETFs consists of four actively managed US large-cap equity funds targeting quality, momentum, value, and low volatility factor risk premia.

They are the SEI Enhanced US Large Cap Quality Factor ETF (SEIQ US), SEI Enhanced US Large Cap Momentum Factor ETF (SEIM US), SEI Enhanced US Large Cap Value Factor ETF (SEIV US), and SEI Enhanced Low Volatility US Large Cap ETF (SELV US).

The fully transparent ETFs replicate existing strategies on offer through SEI’s separately managed accounts.

SEI utilizes a quantitative stock selection process that combines factor scoring, risk modeling, and portfolio optimization. Each ETF aims to deliver enhanced exposure to its target factor while simultaneously ensuring diversification and managing risks associated with additional factors.

Each fund comes with an expense ratio of 0.15%.

Kevin Barr, Head of SEI’s Investment Management Unit, said: “Investors are increasingly looking for investment products that seek to generate positive outcomes, especially amid today’s persistent inflation and market volatility.

“Our investment platform is crafted expressly to help meet our clients’ needs and goals, and we are excited to introduce our proprietary, actively managed factor-based investment strategy in a lower-cost vehicle that can help investors achieve their investment objectives.”

The funds join a crowded field with nearly 200 ETFs in the US classified as providing factor-based exposure to US-listed equities. Several of these products house billions of dollars in assets.

While investors may obtain value or growth-tilted exposure for as little as 0.04% through ETFs offered by Schwab, BlackRock, SPDR ETFs, or Vanguard, SEI’s ETFs are considerably on the lower end of the cost scale, especially for actively managed products.

As volatility in markets persists, investors may be attracted by the dual offering of relatively low fees and active risk management.

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