(Bloomberg) — Neuberger Berman Group LLC is launching three actively managed exchange-traded funds on Thursday, becoming the latest major asset manager to dive into Wall Street’s $7 trillion ETF industry.
The Neuberger Berman Connected Consumer ETF (ticker NBCC) focuses on companies that benefit from the spending habits of Gen Zs and Millennials, or those born roughly between 1981 and 2012. The Carbon Transition and Infrastructure ETF (NBCT) invests in businesses transitioning to carbon processing, electrification, and carbon-reduction solutions. The Disruptors ETF (NBDS) targets nearly 30 companies in the tech, healthcare, consumer and financial sectors that could shape the future.
The launches mark the latest in a series of ETF admissions by major asset managers as investors increasingly abandon mutual funds in favor of cheaper, easier-to-trade wrappers. Already this year, Capital Group has split after a decade, and last week Morgan Stanley revealed it was building its own ETF platform.
According to Hari Ramanan, chief investment officer for research strategies at the firm, Neuberger has chosen actively managed, thematic offerings to stand out in a heavily saturated market. According to data compiled by Bloomberg, about 3,000 ETFs are now traded in the US.
“It’s a crowded market,” Ramanan said in an interview. “If we’re going to come and join this party, we’ll better bring something different from what’s already there, we’ll better bring something incremental.”
Thematic funds – which invest based on emerging trends such as robotics or clean energy – in recent years along with an influx of retail investors as the pandemic accelerated digital adoption across many industries. However, they have stalled amid this year’s stock turmoil, according to data from Bloomberg Intelligence, and assets in thematic ETFs have declined from $164 billion at the end of 2021 to nearly $145 billion.
Employee-owned Neuberger manages approximately $460 billion. Ramanan said the three new funds bring years of research to market understanding both consumers and companies. They were created in response to clients who wanted access to the firm’s strategies through ETFs.
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Each fund will have a 0.55% expense ratio.