SS&C ALPS Advisors launched a new ETF on Wednesday, an active large-cap ETF to add to its roster. Collaborating with Level Four Capital Management, the firm has added the Level Four Large Cap Growth Active ETF (LGRO) to its ETF suite. The strategy joins notable existing ETFs in the firm’s list, including the ALPS Sector Dividend Dogs ETF (SDOG ) and the ALPS O’Shares U.S. Small-Cap Quality Dividend ETF (OUSM ).
LGRO will charge a 55 basis point (bps) fee according to its prospectus, carefully selecting high quality U.S. firms. The ETF will actively invest in firms selected by Level Four based on their growth potential, trading on the Nasdaq. The ETF defines large cap companies as those with market caps larger than $10 billion. LGRO’s subadvisor expects the strategy to lean on U.S. companies, though it retains the ability to invest in foreign equities.
See more: Q&A With SS&C ALPS Advisors Chief ETF Strategist Paul Baiocchi
How the Active Large-Cap ETF Invests
LGRO will target growing firms trading below or at their value based on the present value of cash flows generated in the future. It also considers companies with a high return on capital, high-quality financial reporting, and strong management.
“ALPS Advisors is recognized for its collaboration with world-class sub-advisors, and our Level Four Capital Management partnership continues this tradition,” said Laton Spahr, President of SS&C ALPS Advisors. “The disciplined strategy focuses on investing with a business owner’s mindset with an emphasis on quality growth and price paid relative to current value.”
Active strategies have attracted significant interest from institutional and retail investors this year. With U.S. equities particularly expensive right now, perhaps over-reliant on megacap tech firms, consider an active large-cap ETF. For investors looking to reassess their portfolios entering the final quarter of 2023, LGRO may be one to watch.
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