Ocean Park's First ETFs Hew to Mutual Fund Strategy
The $5B asset manager launched 2 stock and 2 fixed income ETFs.
Ocean Park Asset Management, which manages more than $5 billion worth of mutual fund assets, has joined the ETF space with four trend-following actively managed strategies that invest in other ETFs.
The Santa Monica, Calif.-based firm, which traces its history to 1987 as a financial advisory business, modeled the funds after its existing mutual fund strategies.
But as Chief Investment Officer James St. Aubin explained, the ETFs are not clones of the mutual funds.
He described the two equity and two fixed income ETFs as “sister strategies” to the mutual fund lineup, which is slated to be rebranded Ocean Park from Sierra Mutual Funds.
St. Aubin said most of the mutual fund assets have come in through turnkey asset management platforms, where he plans to also position the ETF suite.
Ocean Park Enters ETF Field
An indication of the firm’s commitment to the mutual fund business at a time when investors and financial advisors are migrating toward ETFs is illustrated by its eighth mutual fund launch as recently as October. But St. Aubin said it is no longer realistic for an asset manager to not participate in the ETF space.
“I like to say, an asset manager today without ETFs is like a person with just one arm,” he said. “You can get by, but not necessarily with the best outcome.”
On the equity side, the ETF suite includes the Ocean Park Domestic ETF (DUKQ), investing in U.S. equity ETFs, and the Ocean Park International ETF (DUKX), investing in international equity ETFs, including the emerging markets.
St. Aubin said the equity ETFs will each represent portions of the Sierra Tactical Core Growth mutual fund (STEJX), with the 70% domestic equity slice being managed similar to DUKQ and the 30% international slice being managed like DUKX.
On the fixed income side, there is the Ocean Park Diversified Income ETF (DUKZ), which invests across the investment grade bond spectrum, and the Ocean Park High Income ETF (DUKH), which invests in high-yield markets.
St. Aubin said DUKZ most closely resembles the Sierra Tactical Core Income mutual fund (SSIRX) and the DUKH is similar to the Sierra Tactical Bond mutual fund (STBJX).