This week saw the launch of a research-driven actively managed ETF from a female-led asset manager. And no, we’re not talking about Cathie Wood’s ARK but rather a firm called SPEAR Invest.
The SPEAR Alpha ETF (SPRX) relies heavily on in-house research and analysis to select companies that seem likely to “benefit from breakthrough innovation in industrial technology,” according to its prospectus, or that could “transform” the industrial sector.
SPRX comes with an expense ratio of 0.75% and lists on the Nasdaq stock market.
Basically, the fund is looking for disruptive innovation opportunities in the industrial sector, with the categories of focus including environmental focus and decarbonization; manufacturing digitalization; robotics and industrial automation; photonics and additive manufacturing; space exploration; and artificial intelligence.
“Although SPRX invests in innovative industrial technologies, we believe the real value comes from finding under-the-radar opportunities across the supply chain,” Ivana Delevska, SPEAR Invest’s founder and SPRX’s manager, said in a press release.
“The fund is based on a strategy built on primary research in a sector that could have significant and underappreciated tail winds over the next five years,” she added.
The referenced primary research includes anything from conversations with management of companies in question to delving into court hearings and accounting issues.
SPRX’s universe includes about 120 securities that fall under the identified themes. From there, the firm looks at aspects like competitive positioning, financial performance, management quality and ESG criteria in order to winnow the securities down to a high-conviction portfolio of roughly 25 holdings.
At launch, the company’s top holdings included Ingersoll Rand (5.13%), General Electric (5.11%) and Nvidia (4.99%). Given that only one stock in SPRX’s top 10 holdings appears in the portfolio of the ARK Innovation ETF (ARKK), the similarities with Cathie Wood’s firm seem to be limited largely to a shared focus on disruptive innovation and high-conviction stock selection backed by intensive research.
(Use our stock finder tool to find an ETF’s allocation to a certain stock.)
Contact Heather Bell at [email protected]