Gabelli Funds, a division of GAMCO Asset Management, has launched its second actively managed ETF.
The fund targets companies that are enabling and benefitting from technological innovation.
The Gabelli Growth Innovators ETF (GGRW US) has listed on NYSE Arca and targets companies aligned with the theme of technological innovation.
The fund captures businesses that are both enabling and benefitting from secular trends in the digital economy including the mass adoption of cloud computing, 5G, internet-of-things, big data, and artificial intelligence.
Gabelli notes that these secular trends have accelerated due to the Covid-19 pandemic which has served as a force function for technological adoption, pushing consumers into digital channels and compelling enterprises to speed up their digital transformation agendas.
The eligible universe of constituents includes US-listed common and preferred shares of domestic companies as well as American Depository Receipts.
The fund’s managers use fundamental analysis to develop earnings forecasts for companies based on economic and industry data, corporate financial reports, and direct interviews with company management. The managers then select companies with competitive moats and future cash flow streams that are undervalued at current market prices.
The fund comes with an expense ratio of 0.90%.
Gabelli debuted its first ETF earlier this month. The Gabelli Love Our Planet & People ETF (LOPP US) invests in US equities while incorporating value and ESG factors. The fund also comes with an expense ratio of 0.90% which will be waived on the first $100 million invested for a period of at least one year.
Both ETFs harness the ActiveShares semi-transparent ETF model developed by Precidian Investments to avoid disclosing daily portfolio holdings while maintaining the tax efficiency, liquidity, and lower costs typically associated with ETFs.
The model masks an ETF’s holdings by inserting a blind trust, known as a ‘confidential account’, between the fund and its authorized participants. These trusted agents are privy to portfolio holdings and perform creations and redemptions on behalf of authorized participants.
ActiveShares ETFs provide a live verified intraday indicative value (VIIV) every second which is more regular than traditional ETFs which currently publish their NAVs every 15 seconds. Official portfolio holdings need only be disclosed on a quarterly basis.