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New ETF Listings: A Mutual Fund Just Changed Its Wrapper, Not Its Stripes

Picture of Bernie Thurston
As mutual fund-to-ETF conversions continue to reshape the listings queue, the latest wave of additions offer a clear reminder that the wrapper is changing far more often than the strategy inside it.

 

RJ ClariVest Capital Appreciation ETF (RJCA, NYSE Arca)


Not every new ticker on the tape is actually new. This one used to be the Carillon ClariVest Capital Appreciation Fund, a conventional mutual fund with a long institutional track record of hunting for undervalued growth stocks. It converted into an actively managed ETF on the same day it landed in the new listings feed, joining the steady march of legacy mutual funds trading their paper wrappers for exchange tickers.

The strategy hasn't changed. The managers haven't changed. ClariVest Asset Management is still running the same undervalued-growth playbook it always has, just inside a structure that trades intraday and settles like any other ETF instead of pricing once a day at net asset value.

It is less a launch than a change of clothes, and in a listings queue that usually serves up leverage and buzzwords, that makes it the closest thing to actual news at the beginning of a quiet month.

It is not the only firm doing this. Harding Loevner just gave its International Developed Markets Select Equity strategy the same treatment, wrapping a stock-picking approach it has quietly run for well over a decade into its first-ever ETF, ticker LOEV, with the same managers and same philosophy included. Between this and RJCA, the pattern is getting hard to miss: the strategy stays exactly as it was, only the wrapper gets a rebuild.

Bernie Thurston

Bernie loves data. Fortunately for him, London’s finance industry has been indulgent, providing him lots of benchmark data to play with and enjoy. Bernie’s journey began at Sky, where he designed the first interactive television and helped build a technical-based charity (ctt.org). He then hopped over to finance, and soon found himself at a start-up working on dividends and derivatives. Then, by nature of the fact that finance and technology have rapidly conjoined, he found himself working with Credit Suisse to build an index aggregation and distribution platform. Markit then acquired the start-up and Bernie battled his way up the greasy pole becoming the Managing Director of Markit’s equities division, with responsibility for index, ETF and Dividends. But the siren song of startups called once more. And Bernie was headhunted to rescue a failing index business. Over five years, he helped reverse the fortunes of DeltaOne Solutions, turning into a fighting force. So successful was the turn around that Markit came along and acquired this company as well. But Bernie still loved start-ups. To that end, he founded Ultumus, an ETF and benchmark data company. Ultumus aims to provide the best data in the most timely and consumable manner possible. With clients on both buy and sell side, when something happens in the index or ETF industry, Ultumus is the first to know.

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