The passive pull is proving too strong to pass up.
Nationwide Mutual Insurance Co. is launching three exchange-traded funds that use strategic beta strategies. The new ETFs will aim to track risk-weighted indexes that provide a “smoother ride” for investors, Chris Graham, chief investment officer for Nationwide Funds, said in a phone interview.
In June, the Columbus, Ohio-based insurance and financial services company held talks with Precidian Investments to license a type of active ETF that would keep its holdings hidden and sought regulatory permission to launch an active fund using a rival structure from Eaton Vance Corp. Those efforts are still in the works, and the firm already has active mutual funds. This is its first foray into passive investing.
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“If you believe in active we have active,” Graham said. “If you want passive, this is a form of passive that’s a little more expensive than the market cap weighted indices, but we think that the value add makes sense.”