Emil Tarazi, CEO of ETFLogic, is setting his sights on the firm's Logicly platform becoming the centralised hub for professional investors following its recent launch in Europe.
Speaking to ETF Stream, Tarazi (pictured) said one segment that has seen significant growth for ETFLogic is environmental, social and governance (ESG) strategies and factors.
Following the growing demand for ESG ETFs in recent years, ETFLogic partnered with sustainable finance company Arabesque to provide ESG scores for thousands of stocks. These scores in addition to offering access to the basket holdings for all ETFs means the platform can calculate the ESG portfolio ratings from the ground up.
“You do not necessarily need to have an ETF that is labelled ESG to have an ESG-tilted ETF,” Tarazi said.
In addition to being able to calculate the ESG score for the user’s own portfolio, the platform can also adjust this score by screening similar ETFs for problematic names that may not comply with the investor’s sustainable or ethical objectives.
Logicly provides scores on the three individual pillars within ESG as well as providing ETF exposures to controversial segments such as tobacco, weapons or nuclear power.
Providing ESG data for global ETFs is just one of the ways ETFLogic is assisting professional investors in making investment decisions.
Founded in 2017, ETFLogic’s team came from a market making background with a particular focus on the ETF industry. From their experiences, Tarazi said they initially wanted to design a platform for ETF issuers to enable capital markets desks to liaise with clients and inform them about particular risk factors and liquidity.
However, ETFLogic wanted to develop this further for the financial adviser and wealth management markets by taking the initial principles of the tool and adding education and simplification of what ETFs are on offer.
Tarazi said the firm has plans to continue developing the platform further. The next development of the tool will be including a Portfolio Coach which will enable investors to optimise the numerous portfolios they are managing.
ETFLogic receives $4 million in seed funding from ETFS Capital
“Adding to the portfolio analytics already available, the Portfolio Coach will give confidence to investors that they are optimising the allocation for the dozens of clients’ portfolios,” Tarazi continued. “It will ensure they are not missing out on any opportunities in terms of tax loss harvesting or tactical overlays in the factor space.”
Additionally, the feature will allow investors to see similar strategies with the same exposure but compare the ETFs to see if there are products that could offer higher yield or lower costs.
The incentive of this feature is in line with ETFLogic’s objective of making things as easy as possible for investors.
Tarazi added: “Investors just want simplification and for everything to be centralised and simple. They do not necessarily want to have to use multiple systems to accomplish a single task.”
To offer this, Tarazi said one of the biggest challenges of launching the platform was integrating third parties to collect all the necessary data and information for the end user.
Having successfully overcome this obstacle, the firm is now wanting to achieve its goal of going global by taking on the European market before also launching in Asia-Pacific but does not want to stop at just ETFs.
“We currently support roughly 7,000 ETFs across 30,000 listings but we do not want to stop there,” Tarazi said. “We are in the process of trying to go beyond just ETFs and looking to introduce US mutual funds to the platform as well.”
