Bill Smalley, Executive Managing Director of Virtus ETF Solutions, met with Julie Cooling, Founder & CEO of RIA Channel, to discuss the firm’s non-traditional income options and new partnership with AllianzGI.
This past year, Virtus ETF Solutions has been focused on income without attributions to a particular asset class. Yields have been low for some time and are anticipated to remain low for the foreseeable future. Virtus ETF Solutions believes that pursuing non-traditional sources of income is the best option for investors with needs above the average market yield. They have been speaking with advisors about preferred stocks, a choice that falls somewhere between fixed and equity income options. Smalley explains that preferred stocks have low equity beta, lower volatility than equities, bond-like attributes, and typically higher yield. Preferred stocks also have many nuanced characteristics that are difficult to capture in a normal benchmark. With this perspective in mind, Virtus has been striving to provide its clients with non-traditional income investment avenues to reach their goals.
Early in 2020, Virtus launched the Virtus Private Credit Strategy ETF (VPC). VPC tracks the Indxx Private Credit Index and has already gained significant traction as a non-traditional asset. On the real estate side, Virtus offers the Virtus Real Asset Income ETF (VRAI) and InfraCap REIT Preferred ETF (PFFR). VRAI has holdings in the real estate, energy infrastructure, and natural resources markets. This ETF gives investors passive exposure to US-listed, real asset securities. Its primary focus is on income. PFFR aims to match the yield outcomes and price of the Indxx REIT Preferred Stock Index; it specifically targets preferred securities issued by REIT. All three of these ETFs are fantastic alternatives to traditional income asset classes.
On July 7th, 2020, Virtus ETF Solutions announced its exciting partnership with Allianz Global Investors (AllianzGI). As a part of this collaboration, Virtus will be able to share AllianzGI’s impressive investment strategies, tailored specifically for the US retail market, with its large client base. Virtus will now act as the investment adviser and distributor of AllianzGI’s open-end, closed-end, and retail separate account assets. Coupling Virtus’ retail offerings with AllianzGI’s portfolio management prowess is a great opportunity for growth for both companies.
Virtus ETF Solutions, an affiliate of Virtus Investment Partners, employs a multi-manager ETF platform. Their program connects investors with differentiated investment capabilities and strategies from select subadvisers. Headquartered in New York City, Virtus ETF Solutions strives to offer personalized, actively-managed products for both its individual and institutional investors.
Bill Smalley has worked with Virtus ETF Solutions since 2012 and currently serves as their Executive Managing Director and Head of Product Strategy and Management. Before founding Virtus ETF Solutions’ predecessor firm, Smalley was the Vice President of Factor Advisor. He has been an influential contributor to the investment industry since 2004.
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