Throughout 2023 and 2024, Strive Asset Management has been a prominent name in the ETF industry, gaining attention for its staunch adherence to the "Shareholder Primacy" principle. In a recent significant strategic move, the firm decided in January to relocate its ETF lineup to the NYSE trading floor.
This decision echoes the steps taken by other major players in the industry, like PIMCO and Harbor Capital, who made similar moves in 2022 and 2023, respectively.
Moreover, JPMorgan (NYSE:JPM) Asset Management has also announced intentions to transition its JPMorgan Active Bond ETF (JBND) to the NYSE floor at a later date.
“We are thrilled to welcome Strive’s ETFs to the NYSE’s trading floor, which combines best-in-class technology and human judgement,” said Douglas Yones, Head of Exchange Traded Products at the NYSE. “The NYSE has always been a leader in innovation, and issuers have shown great interest in the ability to list their ETFs on our floor."
The benefits of these moves to both issuers and end investors have been significant. Specifically, spreads have decreased by 43%, the notional size at NBBO has increased by 34%, and opening and closing slippage have decreased by 80% and 41%, respectively.
"Since the PIMCO Active Bond ETF (BOND) became the first to list on the trading floor in 2022, we have had 17 ETFs transfer to and two directly list on our floor and experience the enhanced market quality produced by our unique market model, which includes tighter spreads, larger quoted size and additional liquidity," Yones says.
Here's a closer look at three of the most notable and interesting ETFs from Strive that recently made the move to the NYSE trading floor.
Strive 500 ETF (STRV)
STRV tracks the Solactive GBS U.S. 500 Index (TR), which includes the 500 largest corporations in the U.S. One key difference, however, is the way these corporations are selected for inclusion in the ETF.
Unlike the S&P 500 ETFs, where a committee decides on the additions and removals of companies, the Solactive GBS U.S. 500 Index operates without such discretionary inputs.
This approach arguably makes STRV more passive in nature, as it relies on a predefined set of criteria rather than committee decisions, providing a transparent and systematic approach to index composition.
An additional feature of STRV is its activism component. Strive Asset Management actively engages with the boards and management of key holdings within STRV. This engagement is aimed at voting for policies and practices that are believed to materially benefit shareholders.
Finally, the ETF is very cost-effective, boasting an expense ratio of just 0.0545%. This low cost makes STRV an attractive option for investors seeking efficient market exposure without incurring high fees.
Strive U.S. Energy ETF (NYSE:XLE) (DRLL)
DRLL is one of the more popular sector-specific offerings from Strive, targeting the broad U.S. energy sector. This ETF tracks the Solactive U.S. Energy Regulated Capped Index.
What sets DRLL apart from some other energy ETFs is its focus on the entire energy ecosystem. This includes not just the upstream explorers and producers but also the midstream pipelines and downstream services and marketing.
The ETF also provides exposure to integrated giants in the industry, such as Exxon Mobil (NYSE:XOM) and Chevron (NYSE:CVX), which constitute around 20% and 14% of the ETF, respectively.
DRLL's scope, however, extends beyond just oil and gas. The ETF also includes companies involved in bituminous coal, hydroelectric power, nuclear electric power, and renewable energy sources such as solar, wind, geothermal, and biomass.
In line with Strive's approach, DRLL also incorporates an activism component through proxy voting and board engagement, which is crucial for a sector as heavily regulated and politically charged as energy. Investors can expect to pay a 0.41% expense ratio for DRLL.
Strive FAANG 2.0 ETF (FTWO)
FTWO offers a contrarian take on the well-known FAANG acronym, which traditionally refers to a group of high-performing U.S. stocks: Facebook (NASDAQ:META) (now Meta), Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN), Netflix (NASDAQ:NFLX), and Google (NASDAQ:GOOGL).
FTWO however, reinterprets the acronym to represent a completely different set of sectors: Fuel (F), Aerospace & Defense (A), Agriculture (A), Nuclear (N), and Gold & Precious Metals (G).
This thematic ETF is particularly suitable for investors looking to hedge against geopolitical unrest or inflation. The sectors represented in FTWO are often considered resilient or even counter-cyclical.
For instance, energy and precious metals often see increased demand during inflationary periods, while aerospace and defense can be pivotal in times of geopolitical instability. Similarly, agriculture and nuclear energy offer foundational economic and infrastructural support in various economic conditions.
Additionally, FTWO serves as an excellent option for investors seeking to balance out portfolios that are heavily weighted in technology and financial sectors. The focus on heavy industry and real assets in FTWO provides a diversification benefit, as these sectors often have different performance drivers compared to tech and financial stocks.
This content was originally published by our partners at ETF Central.