Nationwide has entered the exchange-traded funds (ETF) market with three smart beta offerings.
It has launched the Nationwide Maximum Diversification US Core Equity ETF, the Nationwide Risk-Based US Equity ETF and the Nationwide Risk-Based International Equity ETF.
The Nationwide Maximum Diversification US Core Equity ETF tracks an index developed by Paris-based TOBAM which uses liquidity and socially responsible screens to narrow down the investible universe.
Stocks are weighted using TOBAM’s proprietary diversification ratio to craft a portfolio with less correlations between holdings.
The Nationwide Risk-Based US Equity ETF and Nationwide Risk-Based International Equity ETF track indices built by Rothschild Risk Based Investments.
Rothschild looks at both a fund's designated universes and ranks stocks by level of risk. The holdings which are deemed the riskiest 50% are eliminated and the remaining stocks are weighted by volatility and correlations to one another.
According to a Securities and Exchange Commission filing, the firm also plans to launch the Nationwide Maximum Diversification Emerging Markets Core Equity ETF and the Nationwide Diversification International Core Equity ETF.
Chris Graham, chief investment officer for Nationwide Funds, said: ‘As we continue to adapt and respond to major investment management trends in the midst of mounting uncertainty stemming from an aging bull market, Nationwide's strategic beta ETFs may provide investors with options to manage risk, enhance diversification and reduce volatility in their portfolios.’
Last November, the firm stuck a deal with NextShares to offer strategies using the Boston-based firm’s active ETF structure.
Other fund firms that have agreed to use the NextShares structure include Columbia Threadneedle, Gabelli Funds, Hartford Funds, Principal Funds and UBS.