TrueMark debuts with actively managed thematic ETFs

Mar 2nd, 2020 | By | Category: Equities

Illinois-based asset manager TrueMark Investments has become the latest entrant to the US ETF industry with the launch of two actively managed thematic funds on NYSE Arca.

Mike Loukas, CEO of TrueMark Investments

Mike Loukas, CEO of TrueMark Investments.

Issued under the firm’s newly unveiled ETF brand – dubbed True-Shares – the debut funds seek total returns by investing primarily in US artificial intelligence companies or US large-caps with robust environmental, social, and governance (ESG) profiles.

Mike Loukas, CEO of TrueMark Investments, commented, “We’re very excited to bring the True-Shares investment approach to market. We believe the nascent asset classes of the New Economy – such as Artificial Intelligence and ESG – represent generational growth opportunities that are well-suited to active management.”

Each ETF is sub-advised by a third-party firm that specializes in the underlying thematic exposure.

The TrueMark Technology, AI and Deep Learning Fund (LRNZ US) is sub-advised by Black Hill Capital Partners and comes with an expense ratio of 0.68%.

The ETF invests in 20 to 30 US companies that derive at least 50% of their revenue from, or allocate at least 50% of their research capital to, the development or application of artificial intelligence and other deep learning-related technologies.

Black Hill targets four segments (data, hardware, software/algorithms, and sophisticated users) that it believes covers the true breadth of the AI hyper-growth opportunity. It aims to select companies that have a strong competitive advantage, ascribing to the philosophy that technology sectors display a “winner take all” environment.

Sam Kim, Founder of Black Hill Capital Partners, said, “We believe AI has reached a tipping point. With the intersection of big data, ever-increasing computational power, and more sophisticated AI algorithms, we have already started to see changes in the way businesses fundamentally operate. With LRNZ, we hope to provide investors with transparent, affordable access to this rapidly evolving landscape.”

TrueMark’s second ETF is the TrueMark ESG Active Opportunities Fund (ECOZ US), which is sub-advised by Purview Investments and comes with an expense ratio of 0.58%.

The ETF provides exposure to a diversified portfolio of US large-cap companies – those with market capitalizations above $10 billion – that have high ESG ratings according to Purview’s proprietary analysis.

This process includes two stages. Firstly, companies with high carbon emissions are removed from the selection pool. The second stage focuses on traditional ESG metrics such as workplace diversity and corporate governance policies. Approximately 100-150 securities will make it through these two screens.

Purview then further screens the eligible universe to select a final portfolio of 75-125 securities, choosing those stocks with the highest perceived intrinsic value based on traditional metrics of quality.

Linda Zhang, Founder and CEO of Purview Investments, said, “An increasing number of individuals and organizations are demanding investments that align with their values. ECOZ aims to provide investors with an environmentally resilient and sustainable portfolio, offering exposure to large U.S. companies that are champions in their respective industries’ transition toward improved environmental, social and governance practices, while avoiding those enterprises that may carry long-term risks to the global community.”

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