Hartford Funds has introduced its first thematic equity ETF, the Hartford Longevity Economy ETF (HLGE US).
Vernon Meyer, Chief Investment Officer at Hartford Funds.
The fund applies the firm’s trademark multifactor investment approach to a universe of companies poised to benefit from an expanding ageing population.
It has listed on NYSE Arca and comes with an expense ratio of 0.44%.
Vernon Meyer, Chief Investment Officer at Hartford Funds, commented: “Education about the importance of longevity planning has long been a hallmark of the insight Hartford Funds shares with financial professionals, and this product is an extension of that strategy.
“By leveraging our world-class multifactor indexing approach and risk management, the Hartford Longevity Economy ETF seeks to deliver a unique and diversifying shareholder experience by tapping into the underappreciated and persistent value of evolving consumer patterns among the widening senior demographic.”
Methodology
The ETF is linked to the Hartford Longevity Economy Index which consists of US-listed companies from across the market cap spectrum that have average daily trading volume greater than $1 million.
The methodology first screens for companies providing goods and services that reflect Longevity Economy sub-themes. These include aging in place, home modification, working longer, performance health, social connections, financial freedom, mobility, human enhancement, and entertainment.
From this reduced pool of securities, Hartford utilizes an optimization process to select and weight the final index constituents.
The process aims to enhance exposure to traditional factors such as value, quality, and momentum while accounting for size, sector, industry, liquidity, and turnover constraints.
The index is reconstituted and rebalanced semi-annually.
Established theme
There are currently three ETFs tracking the ageing population and longevity economy investment theme, including two US-domiciled funds from Global X and Janus, and one Europe-domiciled fund from BlackRock.
The Global X Longevity Thematic ETF (LNGR US) tracks the Indxx Global Longevity Thematic Index which covers pharmaceutical companies focused on age-related ailments, medical device manufacturers, senior care facilities, and senior-focused health care service providers. The fund, which launched in May 2016, houses $40m in assets and comes with an expense ratio of 0.50%.
The Janus Long‐Term Care ETF (OLD US) is linked to the Solactive Long-Term Care Index which includes companies operating senior living facilities, managing specialty hospitals, providing nursing services, or engaging in biotech research for age‐related illnesses. The fund debuted in June 2016, it houses $25m AUM and costs 0.30%.
The iShares Ageing Population UCITS ETF (AGED LN) is linked to the STOXX Global Ageing Population Index which is composed of companies that are generating significant revenues from the growing needs of the world’s ageing population (defined as people aged 60 years and above). This UCITS fund debuted in September 2016 and is by far the largest of the three with $747m in assets.