ETF Investment Services
A focus on Index and ETF portfolio management
Our ETF investment process is built around risk control and producing consistent and replicable results.We understand what it takes to minimize tracking error relative to a benchmark and we also understand the unique challenges and tradeoffs in managing ETFs. We have the experience and the capability to handle all types of mandates and asset classes including passive and active, equity, fixed income, currency, commodity and fund of funds. We view ourselves as an extension of your business and act with the same kind of pride and ownership as though it were our own. Our team has extensive experience managing index funds in many different vehicles including separate accounts, bank collective trust funds, mutual funds and ETFs.
Not only are we familiar with the structure of the different vehicles, but we are also familiar with the various regulatory and tax issues unique to each vehicle. We maintain relationships with all of the major index providers and have managed money benchmarked to indexes from all of the major providers. We are comfortable with strategies that fully replicate as well as optimization techniques that look to minimize tracking error while owning a subset of the full index universe. ETFs are a specialized subset of the mutual fund world and because most ETFs are index based they are also a niche of the indexing world.
As a boutique provider of asset management and implementation services, Penserra is uniquely positioned to blend the two disciplines into an ETF sub-adviser service. This typically means the sponsor of the ETF is the adviser and Penserra is the sub-adviser handling portfolio management, basket construction and maintenance, and capital markets support. We work with the sponsor to craft an investment policy up front that looks to minimize tracking error and capital gains and maximize liquidity.
We also take a very consultative approach with the sponsor during the product development phase by providing education and assisting with new index creation and/or index provider evaluation. Because we have experience launching dozens of ETFs and our experience goes beyond portfolio management to broad executive management at large ETF sponsors, we are able to help identify potential risks and pitfalls and establish policies and procedures to mitigate them. We maintain relationships with all of the major authorized participants (APs) and liquidity providers and can work with them during the product development process to ensure a product that will work at all levels.
Cost of trading (spread, impact, premium/discount) which is best controlled via the PM and basket process
Our portfolio management process is built on a foundation of risk controls and looks to balance the sometimes competing objectives of tracking error, tax efficiency & liquidity.
We believe the basket process is much more than a back office operational exercise and take an active role in ensuring baskets support the goals of the portfolio and capital market efficiency.
Once a product is launched we take full ownership of the day to day management of the fund from the investment process to the basket process and on through any capital markets support that is necessary. Not only do we manage the fund to meet its objectives, we oversee the production and validation of the creation/redemption basket and respond to any questions or concerns from APs and liquidity providers that may arise.
For more information, please contact Dustin Lewellyn at email@example.com