Gabelli Plans First Active ETF

The fund’s fees are waived on the first $100 million in assets it gathers through the first year.

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Reviewed by: Heather Bell
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Edited by: Heather Bell

Gabelli Funds, a firm headed by preeminent Wall Street stock picker Mario Gabelli, has announced it will be launching its first ETF, an active value-focused ETF for ESG investors.

Focusing on environmental, social and governance issues, it will come with no fees for its first year of operation unless it hits $100 million in assets under management, after which the fee wlll apply only to the assets above that amount, according to its prospectus. The Gabelli Love Our Planet & People ETF (LOPP) will be the first true ETF offering from the issuer, which is devoted to traditional active management.

A press release from GAMCO Investors, which owns Gabelli Funds, describes the fee waiver as part of a loyalty program for the firm’s private wealth and mutual fund clients, but it applies to all investors in the new product. After the first year of trading, the fund will charge the full 0.90% expense ratio detailed in its prospectus.

Gabelli Funds is headed by Mario Gabelli, the chairman and CEO of GAMCO and a well-known traditional active manager lauded for his stock-picking abilities. However, he is not listed as one of the fund’s managers.

LOPP is focused on U.S. securities, including American depositary receipts, and uses a value investing approach informed by ESG analysis. However, its emphasis seems to be more on social criteria, such as a company’s workplace policies, though the document explicitly states that the fund will not invest in companies involved in a wide range of controversial business activities.

LOPP excludes fossil fuel companies; the largest aerospace and defense contractors; and companies generating significant revenues from tobacco, alcohol, gaming and defense/weapons production. It relies on in-house research and third-party data from providers like MSCI, the prospectus says.

The fund will rely on the Precidian model for active ETFs and disclose its holdings on a monthly or quarterly basis, depending on circumstances, according to the fund document.

Contact Heather Bell at [email protected] 

Heather Bell is a former managing editor of etf.com. She has also held editorial positions at Dow Jones Indexes and Lehman Brothers. Bell is a graduate of Dartmouth college and resides in the Denver area with her two dogs.