Asset management firm Emles Advisors launched on Oct. 15 with the goal of solving the unique challenges of today’s markets through its recently filed ETFs.
The firm will invest in public and private markets, focused on providing investors of all sizes access to non-traditional asset classes and strategies designed to generate uncorrelated returns.
Emles is founded by Gabriel Hammond (pictured above), CEO, and Dave Saxena, CFO, formerly of Alerian, the leading energy infrastructure data and analytics company. Both have a proven track record of financial ingenuity and specific experience in sourcing and creating new asset classes that were previously inaccessible by most investors.
The firm is developing a suite of public and private funds that seek to provide access to innovative asset classes that have generally been overlooked or undervalued by other asset managers. Emles will initially offer four ETFs:
- The Emles Made in America ETF (AMER) seeks to capitalize on the secular shift of deglobalization by investing in U.S. manufacturing companies that generate substantial revenue in the United States.
- The Emles Federal Contractors ETF (FEDX) provides exposure to stocks whose revenues are mostly derived from federal contracts with the U.S. government.
- The Emles @Home ETF (LIV) is designed to provide thematic exposure to companies that may stand to benefit from the accelerating shift towards more time spent at home.
- The Emles Real Estate Credit ETF (REC) delivers access to bonds issued by real estate companies, which can offer the income and diversification benefits of the real estate asset class.
ETF Trends caught up with Gabriel Hammond to discuss the firm, what sets them apart, their funds and what opportunities they see in today’s market.
How is Emles different from other ETF issuers?
Gabriel Hammond: It is a combination of several factors. Our entire team is dedicated to building an asset management firm where we seek to align our incentives, and those of our clients. In that spirit, we intend to invest our own capital in each of the funds that we market such that we succeed only if our investors succeed. We have also done this before, having founded Alerian and Steelpath, and I believe we have built a better team this time around. We bring significant depth of experience from Bank of America, Blackrock, Carlyle, Invesco, J.P. Morgan, Oppenheimer, PineBridge, Schroders, and UBS.
Finally, it is what we want to achieve. We created this company because when I looked around there was nothing I would invest in. So we’re building the infrastructure to be able to source and invest in what we believe are attractive, uncorrelated asset classes that investors have historically struggled to access. I am developing an investment company built for today’s markets and investors – with a goal of creating new and interesting asset classes through cost-effective vehicles.
Do you view the working from home trend as a long term thematic opportunity?
Gabriel Hammond: Even before the pandemic hit, we were prepping for a product geared towards giving investors access to companies that are well placed to benefit from the live at home economy. While COVID-19 has certainly accelerated the shift in lifestyle – where we work, consume, educate, entertain and exercise all at home – we believe this is a long-term, structural shift. The Emles @Home ETF (LIV) provides access to an investment opportunity that will continue to last and evolve over the next decade or two.
Why should investors consider an allocation to real estate bonds and how should this ETF be used?
Gabriel Hammond: With the interest rate environment expected to remain low for some time, coupled with the strong fundamental underpinnings of real estate companies, we believe that the debt they issue may represent a compelling opportunity. The Emles Real Estate Credit ETF (REC) is the first of its kind and aims to provide income and diversification for investors. I think it could effectively complement and diversify a broader real estate allocation. Real estate markets are subject to volatility especially during times of stress, so investing in REC adds a layer of security and diversification for real estate investors.
Can you talk about federal contractors and why we should consider an allocation in today's economy?
Gabriel Hammond: The Emles Federal Contractors ETF (FEDX) invests in a portfolio of U.S. companies that have significant revenue exposure to federal contracts with the U.S. government. We believe the U.S. government will continue to award federal contracts, and continue to invest in the economy, especially in times of economic stress. Companies with high exposure to U.S. federal contracts may offer investors with growth potential and stable through-the-cycle revenues, as federal contracts are guaranteed by the U.S. government. It may seem like there is an ETF for everything, but there are still sub-segments that are overlooked and we think this is one of them. FEDX aims to provide upside potential and a competitive yield for investors who seek defensive equity exposure during times of economic stress.
What other areas are you working on that are important for today's market?
Gabriel Hammond: We have a rolling launch schedule over the coming months with many more products being readied in the pipeline. You can expect investment strategies spanning areas such as digital assets, and esoteric equity and debt. Private credit is a big focus area for us and we think investors should have much easier access to these assets than they currently do, so keep a lookout for innovative products in this area especially.
For more information, visit www.emles.com.