London-based investment manager Man Group, most famously associated with its hedge fund heritage, has officially entered the ETF industry in the U.S. On Thursday, the firm listed two actively managed credit funds, Man Active High Yield ETF (NYSE:MHY) and Man Active Income ETF (NYSE:MANI).
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The launch marks a strategic rollout for a company with $193.3 billion in assets under management, and places it in the ranks of other global players now pursuing growth in the booming U.S. ETF market.
Also Read: Vanguard Debuts First High-Yield Active ETF, Raising Its Income Game
Hunting For Yield in Riskier Corners
The Man Active High Yield ETF, managed by Mike Scott, launched with around 100 holdings and has an expense ratio of 0.69%. The fund will focus on high-yield debt and will have the flexibility to invest up to 30% of its assets in C-rated bonds — the lower end of the credit spectrum.
Scott told the fund would consciously avoid bigger issuers that tend to dominate the market and turn instead to smaller and mid-sized names. They tend to be under the radar but can be good opportunities, he said, continuing that high-yield debt has long been seen to be resilient in periods of volatility.
Flexible Approach To Income
The second fund, the Man Active Income ETF, arrives at a 0.85% fee and with a slightly smaller portfolio of about 30 securities. Run by Jonathan Golan, the fund doesn’t commit to a particular sector or geography. Rather, it will wander through corporate, government and securitized debt, employing a bottom-up approach to find opportunities.
Golan described MANI's strategy as cycle-aware and selective, saying the fund will "navigate through the cycle between markets, sectors and individual companies which in our view present the best prospects for income and capital growth."
Through MHY and MANI, Man Group joins the ranks of heavyweights who are riding the U.S. demand for actively managed ETFs. With income products growing increasingly popular with investors as markets become more volatile, the move allows the firm to stake a claim in a sector that is still growing rapidly.
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