Hartford Rolls Out Longevity ETF

Today, Hartford Funds launched an ETF that focuses on companies that cater to or are favored by the older segments of the population. The Hartford Longevity Economy ETF (HLGE) is the issuer’s first thematic fund and tracks an index of 300 to 350 securities.

HLGE comes with an expense ratio of 0.44% and lists on the NYSE Arca.

“Based on the research that has been conducted, we believe that aging demographics present a pretty interesting investment opportunity,” said Brian Kraus, head of investment consulting and internal sales at Hartford Funds. He noted that between increased life spans and declining birth rates, people over 50 account for more than half of consumer spending in the U.S.

“There are many companies that have begun focusing on the increasing and changing needs and desires of these aging consumers,” he added.  

The index targets U.S. securities falling within themes associated with the fact that people are living longer and remaining healthy for more years than in previous generations. The themes covered by the index focus on concepts like health, aging in place, well-being, social connections, financial security, mobility, leisure and entertainment, among others, according to the prospectus.  

“We believe that many of these market segments offer investors higher growth potential over the long term,” Kraus said, adding that the themes covered by the index could shift over time as technology and consumer needs evolve.  

Beyond merely capturing companies benefiting from the demographic shift in the U.S., the index methodology has a multifactor element to it as well, with security selection taking into account exposure to factors like value, momentum and quality. It also selects companies based on their exposure to volatility and liquidity risk, the document says.

“It’s effectively combining a top-down element to focus our attention around subindustries and companies that have exposure to this longevity economy theme with a bottom-up approach of looking for individual companies that have really good valuation, momentum and quality characteristics,” Kraus explained.

Contact Heather Bell at [email protected]