Evolve makes active ETF moves

The firm has launched a new fixed-income fund and a new class of units for an existing equity strategy

Evolve makes active ETF moves

Evolve ETFs has announced the launch of a new fixed-income ETF as well as a new class of units for its US core equity strategy.

The new Evolve Active Global Fixed Income ETF (EARN), trading on the TSX, is designed to give Canadian investors access to an actively managed ETF primarily invested in global debt securities from corporate issuers. It seeks positive returns throughout interest-rate and economic cycles through allocations to different credit asset classes as well as bottom-up selection of individual securities. EARN aims to provide long-term returns exceeding the 3-month US dollar London Interbank Offered Rate.

For the past decade, Canadian ETF industry assets have increased at a rate of 25% a year, with fixed income growing fastest in number, popularity, and assets. “Over the past five years, the majority of active bond managers have outperformed passive mutual funds and ETFs,” noted Evolve ETFs President and CEO Raj Lala. “Active management in fixed income allows managers to position their portfolios appropriately to take advantage of market trends.”

The fund will be sub-advised by Allianz Global Investors (AllianzGI), a leading active asset manager with over 700 investment professionals across 25 offices worldwide as of June 30. AllianzGI manages US$612 billion in assets for individuals, families, and institutions, including US$36 billion in global fixed income.

“We are excited to partner with Evolve ETFs in sub-advising our first actively managed ETF and strengthening our foothold in Canada – a key growth market with fantastic opportunity,” said David Newman, Head of Global High Yield at AllianzGI.

Evolve ETFs has also launched an unhedged US dollar class of units of its Evolve Active US Core Equity ETF. The units, trading on the TSX under the ticker symbol CAPS.U, are provided for the convenience of Canadians who’d prefer to invest in US dollars.

CAPS seeks long-term capital appreciation primarily through investments in equity securities from US-listed large-cap companies. Sub-advised by Nuveen Asset Management, the fund uses a selection process that combines quantitative techniques, fundamental analysis, and risk management. Bob Doll, a chief equity strategist at Nuveen, is the lead senior portfolio manager for CAPS.

“CAPS.U complements the existing classes of our US Core Equity ETF,” Lala said. “Bob's impressive track record and expertise in managing US equities has translated into significantly outperforming the benchmark, net of fees.”

CAPS.B, the unhedged series of the fund, has gained 12.7% year-on-year, compared to 9.13% for the Russell 1000 Index (CAD). CAPS, meanwhile, has advanced 9.43%, in contrast to 6.97% for the Russell 1000 Index (USD).


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