Today, 6 Meridian launched an ETF that combines exposure to both the quality and growth factors. The 6 Meridian Quality Growth ETF (SXQG) is quantitatively managed with the intention of offering investors capital appreciation.
SXQG comes with a rather high expense ratio of 1.00% and lists on the NYSE Arca.
“This is a strategy that’s focused on owning the quality piece of the growth market,“ said 6 Meridian Chief Investment Officer Andrew Mies.
The methodology targets U.S. companies exhibiting above-average quality and growth characteristics after screening out microcaps and companies with low levels of liquidity and momentum. From there, companies are ranked based on their quality and growth exposures, with the highest ranking selected for inclusion in the portfolio. Individual company weights are capped at 5% of the portfolio, the prospectus says.
“It creates a portfolio that looks different than your typical growth portfolio. We have the Amazons and the Facebooks. We have the usual suspects, so to speak, but also we have companies like Lowe’s, the home improvement retailer, which has an amazing growth story over the last 35 years, and continues to grow at a rapid rate and is a very efficient user of capital,” Mies said.
“There is growth taking place in other places besides technology. And there are a lot of older line companies using technology to allow them to grow and, quite frankly, dominate,” he added.
6 Meridian first entered the ETF market last year with four ETFs relying on active strategies the firm had originally offered as separately managed accounts (SMAs). The firm is very focused on tax management, and adapted those strategies for an ETF wrapper precisely because of the tax advantages offered by ETFs. SXQG is the first ETF from 6 Meridian that has no corresponding SMA as the ETF structure is simply more tax efficient.
The addition of SXQG brings 6 Meridian’s total number of ETFs to five. The firm has a total of $553.4 million in assets under management in the ETF space.
Contact Heather Bell at [email protected]