SEI plants its flag in ETF land with factor-based strategies

SEI Investments has officially jumped on the ETF bandwagon with a suite of four funds that began trading Wednesday. The large-cap, factor-based strategies are designed to support goals-based wealth management, the company announced Wednesday.

The exchange-traded funds include SEI Enhanced U.S. Large Cap Quality Factor ETF (SEIQ), SEI Enhanced U.S. Large Cap Momentum Factor ETF (SEIM), SEI Enhanced U.S. Large Cap Value Factor ETF (SEIV) and SEI Enhanced U.S. Large Cap Value Factor ETF (SEIV).

“Investors are increasingly looking for investment products that seek to generate positive outcomes, especially amid today’s persistent inflation and market volatility,” Kevin Barr, SEI’s head of investment management, said in a prepared statement.

“Our investment platform is crafted expressly to help meet our clients’ needs and goals, and we are excited to introduce our proprietary, actively managed factor-based investment strategy in a lower-cost vehicle that can help investors achieve their investment objectives,” he said.

SEI said the Factor ETF suite seeks to provide long-term capital appreciation, utilizing a quantitative-based, active stock selection investment strategy to evaluate large-capitalization stocks tailored to each of the respective factors.

The ETFs are optimized to a portfolio with exposure to equity securities corresponding to each relevant factor or outcome, while concurrently managing additional exposures to other factors. The ETFs are actively managed by SEI’s internal investment team and include a 15 basis point management fee. 

Todd Rosenbluth, head of research at ETF Trends, said the new SEI funds could be the right product at the right time.

“As the market volatility has increased in recent months, advisers have gravitated to factor ETFs focused on quality and low volatility that provide some downside protection,” Rosenbluth said. “These new ETFs join a field that includes popular ETFs” including iShares MSCI USA Quality Factor (QUAL), Invesco S&P 500 Low Volatility (SPLV) and iShares MSCI USA Minimum Volatility Factor (USMV).