Legendary value investor Jeremy Grantham has launched his firm’s first active ETF called the GMO U.S. Quality ETF. He has put GMO partner Tom Hancock in charge of it. According to Hancock, interest in active ETFs has increased in recent years, especially among institutional clients, due to tax advantages and ease of trading.
The new ETF focuses on companies that can sustainably deploy capital and generate high rates of return, with a specific emphasis on technology, health care, and consumer staples. As of November 17th, the ETF’s top holdings include Microsoft, UnitedHealth, and Johnson & Johnson.
Hancock believes that these companies have a competitive advantage and strong balance sheets, making them resilient and relevant in the long term, even though their performance is mixed this year.
ETF Store President Nate Geraci views active ETFs as a natural evolution in the industry, offering a better chance at outperformance for investors and giving active managers improved prospects for long-term success.
Since its launch, the GMO U.S. Quality ETF has seen minor gains, up less than half a percent.
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