SEI Launches First ETFs

The $1.3 trillion asset manager’s first four funds are taking on iShares on price.

SEI Investments Co. is the latest asset manager with more than $1 trillion under management to join the ETF market. 

The SEI Enhanced U.S. Large Cap Quality Factor ETF (SEIQ), the SEI Enhanced U.S. Large Cap Momentum Factor ETF (SEIM), the SEI Enhanced U.S. Large Cap Value Factor ETF (SEIV) and the SEI Enhanced Low Volatility U.S. Large Cap ETF (SELV) debuted on the Cboe Global Markets Wednesday. Each fund charges an expense ratio of 0.15%. 

All four funds target large cap U.S. stocks based on their corresponding investing factors. The ETFs are all actively managed based on existing strategies SEI runs in separately managed accounts, and all are fully transparent. 

SEI reported having more than $1.3 trillion in assets under management or administration across its hedge fund, private equity, mutual fund and asset management arms, according to the company’s latest quarterly report. 

The firm is targeting an already-populated set of strategies in its first set of launches. Several major issuers, such as Vanguard, J.P. Morgan, Invesco and Nuveen, already run factor-based large cap ETFs with hundreds of millions or billions of dollars in assets.  

iShares is the clear leader in the market, managing more than $69.2 billion in its iShares MSCI USA Momentum Factor ETF (MTUM), iShares MSCI USA Quality Factor ETF (QUAL), iShares MSCI USA Value Factor ETF (VLUE) and iShares MSCI USA Min Vol Factor ETF (USMV). 

Those funds are passive offerings at the same price as SEI’s new offerings. 

Kevin Barr, SEI’s head of investment management, said in an interview that the ETFs are meant to offer investors access to the existing separately managed account strategies without the minimum initial investment as a barrier.  

He also expects the funds to have better risk management and alpha upside than their passive counterparts in the volatile market environment that has pervaded throughout this year. 

“We recognized that with the economic and global regime change that is underway ... that clients were looking for more opportunities to go ahead and deploy their capital into ETFs, but ETFs that would be active,” Barr added. 

SEI has not filed for any other ETFs in its trust, according to SEC filings. 

 
 
Contact Dan Mika at [email protected], and follow him on Twitter