The ETF Show - High Conviction Ideas & Concentrated Equity Investing

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Jenna Dagenhart: Hello and welcome to the ETF Show. Joining us now to talk about concentrated equity investing is Nick Elward, head of institutional product and ETFS at Natixis Investment managers. Nick, it's great to have you with us.

Nick Elward: Thanks for having me, Jenna.

Jenna Dagenhart: What are some of your, your uh high conviction ideas right now?

Nick Elward: Well, besides having high conviction as in concentrated products as being uh one of our top ideas. Um Also active management is a high conviction theme right now. Uh for investors uh why settle for less than a market returns with passive? Uh It's a question that we, we ask our ourselves of clients all the time.

I probably want to at least split my exposure between active and passive knowing that there are a lot of markets in which active outperforms passive and some markets where passive outperforms active. Uh the narrative, I think that passive is superior to active is overrated and, and in my opinion, inaccurate,

Jenna Dagenhart: could you share a little bit more about your ETF with the ticker of VNSE?

Nick Elward: So the Natixis Von Nelson select ETF, as you said, Jenna VNSE has nearly a three year track record and its institutional track record goes back over a decade and it's been with the same portfolio management team, Von Nelson, which is based in Houston, Texas. They've been in business for over 50 years. This product is a concentrated equity product investing in us equities. And uh the important thing is what the results have been and looking at the two years that it has a full track record. So 2021 of the, the up market year for equities, it outperformed the S and P 500 benchmark and in 2022 the down year for equities recently, it also outperformed. So we're really happy with the performance of VNSE for investors,

Jenna Dagenhart: any risk to be aware of with this type of investing and how should it be used within a portfolio?

Nick Elward: Well, there's always stock specific risk and certainly when you have a con portfolio with this ETF being about 30 stocks, there is concentration. So if a stock goes down by a meaningful amount, then that will affect a frustrate ETF more so than a uh a really broadly diversified ETF but the Von Nelson team manages risk very carefully by looking at the factor exposure within the portfolio measuring that intraday and ensuring that a single factor such as momentum or size or value uh doesn't affect the portfolio in an in an unintended way.  But besides that, there really aren't any other noteworthy risks beyond a traditional product. Uh as for how Von Nelson uh select BT FVNSE should be used in a portfolio. It's intended to beat the S and P 500. So it's really a great solution for someone that wants  have us equity, large cap exposure as a core holding in a portfolio. So what we've seen many of our investors use it in that way.

Jenna Dagenhart: And finally, you mentioned the institutional track record. Why did it make sense to bring VNSE um to the publicly traded markets and the ETF wrapper?

Nick Elward: Yeah. So we, we got a lot of feedback from our institutional investors and Nelson has, as I mentioned, been in business for over 50 years and mostly has institutional investors as clients and we receive feedback from them and from others that we should bring this institutional product to the retail market and that feedback, we were able to launch the Von Nelson select ETF VNSE as well as a sister product, VN MC, which is a Von Nelson midcap product. So it was really listening to the feedback from existing investors.

Jenna Dagenhart: Well, Nick, thank you so much for joining us.

Nick Elward: Nice seeing you again, Jenna. Thank you for having me

Jenna Dagenhart: and thank you to everyone watching. Once again, I was joined by Nick Ward head of institutional product and ETF S at investment managers and I'm Jenna Dagenhart with asset TV.


Nick Elward, Head of Institutional Product and ETFs at Natixis Investment Managers, joins the show to share some of his top ideas and how high conviction strategies can be used within a portfolio. He also explains why Natixis decided to bring VNSE to the publicly traded markets in the ETF wrapper.