New ETF Aims to Help Veterans Achieve Home Ownership

New ETF Aims to Help Veterans Achieve Home Ownership

The fund aims to lower veterans' borrowing costs by investing in loans made to vets.

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Reviewed by: Lisa Barr
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Edited by: Ron Day

The Academy Veteran Impact ETF (VETZ) takes a different tack than most exchange-traded funds, with a focus on helping veterans achieve homeownership and open small businesses. 

Launched last week by Academy Asset Management, a veteran-owned and -operated asset manager, the fund invests in assets backed by loans to U.S. veterans. The aim is to help make borrowing less expensive for U.S. veterans by increasing the demand for securities backed by loans to them.  

“We see this as a critical tool to help veterans achieve homeownership,” Academy’s Chief Investment Officer Seth Rosenthal said in an interview. “There’s a shortage of housing near military bases, and servicemembers who don’t live on base are given a housing stipend, but it often isn’t enough, especially in more expensive housing markets.” 

Academy launched VETZ Aug. 2, about a year after the firm opened, and it now is valued at $5.45 million. It is the firm’s first fund. 

The ETF invests in investment-grade securities comprising pools of loans made to U.S. servicemembers, veterans, their families or veteran-owned businesses. The fund’s investments are mostly mortgage-backed securities based on mortgages given to veterans and securities based on pools of small business loans given to veteran-owned small businesses. 

Academy had run VETZ’s strategy for separately managed accounts for a year now. The firm launched the fund because clients reached out to it asking for the strategy in a more easily accessible ETF format. 

Focus on Veterans 

With its veterans’ focus, VETZ is different from most ESG funds, Rosenthal said. Funds with a focus on environmental, social and governance investing had large outflows last quarter, as they’ve faced backlash from investors for poor performance, and from conservative politicians for advocating for different social and environmental issues. 

“Those funds are either pro or anti some issue, like oil drilling,” he explained. “To me, supporting veterans, there are not two sides to the issue: Everyone is pro-veteran.” 

The fund will donate a portion of its fees to charities that support veterans and their families once it reaches $100 million in assets. The portion of fees will increase with assets, up to 0.05% for fees on assets over $1 billion.  

While Academy plans future ETFs, for the moment it’s focused on building VETZ, Rosenthal said. The New York-based company currently runs both a core fixed income strategy and a short-duration fixed income strategy for separately managed accounts. 

Another fund that sought to promote veterans’ causes, the Pacer Military Times Best Employers ETF, closed in 2021. 

 

Contact Gabe Alpert at [email protected]           

Gabe Alpert is a former data reporter at etf.com with over seven years’ experience in financial journalism. He also previously contributed reporting and analysis to Barron’s Magazine, Investopedia and other publications.