Boston-based asset management firm GMO, known for its value investing approach, launched three new actively managed ETFs on Tuesday:
- GMO US Value ETF (GMOV)
- GMO International Value ETF (GMOI)
- GMO International Quality ETF (QLTI)
GMOV and GMOI are converted products from existing mutual funds. GMOV focuses on undervalued stocks in developed U.S. markets, while GMOI targets undervalued stocks in developed markets outside the U.S.. Their expense ratios are 0.5% and 0.6%, respectively.
Despite value stocks underperforming growth stocks for two consecutive years, GMO expects the Federal Reserve’s rate cuts to enhance the appeal of value stocks. They emphasize that valuations of value stocks in developed markets outside the U.S. are at their lowest levels since the 1980s.
GMO’s active approach differentiates it from competitors by identifying and investing in undervalued stocks. In contrast, major value ETFs such as Vanguard Value ETF (VTV) and iShares Russell 1000 Growth ETF (IWF) follow passive strategies.
QLTI invests in high-quality stocks in developed markets outside the U.S., with an expense ratio of 0.6%. It was launched amid growing concerns over excessive concentration in the Magnificent 7 stocks.
Additionally, GMO has applied to launch two more ETFs:
- GMO Beyond China (BCHI)
- GMO Systematic Investment Grade Credit (INVG)
Currently, GMO manages approximately $70 billion in assets.
