The ETP industry has spent years arguing that active management belongs in an ETF structure. It has now arrived at a logical conclusion: if active management belongs in an ETF, so do active management fees.
SARF: The iMGP Sirios Absolute Return Fund UCITS ETF
SARF is genuinely interesting. It is, by most accounts, Europe's first UCITS ETF to include a performance fee. One point two percent per year in management fees, plus twenty percent of any outperformance. In an ETF wrapper. Available to any retail investor with a brokerage account.
This is the fee logic of a traditional long-short hedge fund, adapted for people who want daily liquidity and do not have a Cayman Islands partnership agreement. Sirios Capital is a serious long-short equity operation. The strategy is run by six sector-specialist analysts, with a cap on net long equity exposure of thirty percent. But the performance fee arriving in an ETF structure is a statement of intent from the industry: democratisation and carry can coexist. Whether every investor buying SARF in their ISA fully understands that twenty percent of outperformance means the manager captures a fifth of every gain above the high-water mark is, perhaps, a question best left for the Key Information Document.
QTUP: The Defiance Long Pure Quantum ETF
QTUP offers concentrated exposure to a basket of pure-play quantum computing companies including IonQ, Rigetti Computing, D-Wave Quantum, and Quantum Computing Inc.
The quantum computing sector has been on a journey that requires a certain tolerance for narrative over revenue. IonQ is the standout, having crossed a meaningful GAAP revenue threshold and posted strong growth in remaining performance obligations. Rigetti and D-Wave have had more difficult recent periods. The entire sector still burns cash and trades at multiples that depend heavily on assumptions about when quantum advantage translates into commercial advantage. Nobody knows when that is. The stocks move accordingly.
Defiance, not content to offer this theme at one times, also runs QPUX, a two-times daily leveraged version of approximately the same underlying basket. QTUP, the calm non-leveraged version, is essentially the measured older sibling of a product that doubles your exposure to companies that may or may not have working computers yet.
The family resemblance is strong.
AQLG: The HCM Large Cap Growth ETF
AQLG is an actively managed large-cap growth ETF from Howard Capital Management, and its central thesis is a proprietary quantitative tool called the HCM-BuyLine. The BuyLine is a market-trend indicator that tells the fund manager whether to be in equities or cash. When it says “in,” you are in. When it says “out,” you are in cash or cash equivalents, attempting to preserve capital during downturns.
This is, by construction, a market-timing strategy. The product exists on the premise that someone has built a model better than the collective intelligence of the equity market at calling directional turns. The fund invests in U.S. equities when the BuyLine says to, and retreats to cash when it does not.
The BuyLine's current view on the market is not disclosed in the prospectus. One assumes it is bullish, because if you had a proprietary model telling you to hold cash, you would probably not launch an equity ETF on that particular morning.
And then there is WRDSC
The UBS MSCI World Small Cap ETF, listed on the Swiss Exchange under the ticker WRDSC, holds approximately four thousand small-cap equities from developed markets across the globe. It is diversified by sector, region, and company size. It has no proprietary indicators. It is not leveraged. It does not charge a performance fee. It does not contain the word Quantum.
It is, in this particular batch of listings, good to see someone launch a conventional old-school ETF.
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