Traditional Asset Managers Bring Experience Into ETF Space

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Many are familiar with USAA investment management company as a storied financial planner that has helped out millions of people. Now, exchange traded fund investors can also benefit from the money manager's years of experience as well.

"USAA is an asset manager for about $150 billion at this point, so not a household name. We are very well known with our membership - mostly the military community and their families," John Spear, Chief Investment Officer at USAA, said at the Inside ETFs 2018 conference. "That's potentially 60 million members. So we have a large following, a lot of brand loyalty - probably the most trusted financial services company in the world."

USAA has also been a long-time investor in ETFs, and more recently, the money manager has stepped into the ETF game with its own suite of offerings. USAA has two actively managed bond ETFs and four smart beta stock ETFs, including USAA Core Short-Term Bond ETF (NYSEArca: USTB), USAA Core Intermediate-Term Bond ETF (NYSEArca: UITB), USAA MSCI USA Value Momentum Blend Index ETF (NYSEArca: ULVM), USAA MSCI USA Small Cap Value Momentum Blend Index ETF (NYSEArca: USVM), USAA MSCI International Value Momentum Blend Index ETF (NYSEArca: UIVM) and USAA MSCI Emerging Markets Value Momentum Blend Index ETF (NYSEArca: UEVM).

"Not only do we want to serve our military members, we also want to be out there to the advisor channels and really expand where we are going," Spear added.

The new suite of ETFs are built as core portfolio-building components and allow investors more choices at a competitive cost.

The actively managed fixed income ETFs incorporate USAA’s decades of experience in Core Bond categories, with the USAA Core Intermediate-Term Bond ETF focusing on high current income without undue risk to principal and the USAA Core Short-Term Bond ETF targeting high current income consistent with preservation of capital.

Meanwhile, the new smart beta lineup focuses on the value and momentum factors, identifying stocks with attractive valuations and positive price momentum and weighting the two factors in such a way to help investors diversify against the risk of individual holdings.

For more ETF-related commentary from Tom Lydon and other industry experts, visit our video category.

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