US asset manager Harbor Capital Advisors is set to enter the European ETF market after agreeing to become the investment manager on HANetf’s healthcare ETF.
The group will take over the $15m HAN-GINS Indexx-Healthcare Megatrend Equal Weight UCITS ETF (WELL), turning it into an actively managed strategy under its own brand.
The ETF will change its name to the Harbor Health Care UCITS ETF, subject to shareholder and regulatory approval, and will see its total expense ratio (TER) rise from 0.59% to 0.89%.
Current investment manager Vident Advisory will be replaced by Harbor Capital, which currently houses $1.5bn assets under management (AUM) across 10 ETFs in the US, with HANetf providing white-label services to the group.
Following the changes, WELL will stop tracking the Indxx Global NextGen Healthcare index in favour of a stock picking approach led by Harbor Capital.
It will invest in companies engaged in the research, development, production or distribution of products related to the sector, according to a shareholder notice.
This could include pharmaceutical, biotechnology and life science companies as well as providers and manufacturers of healthcare equipment and supplies.
The group currently runs a similar strategy in the US, the Harbor Health Care ETF which has amassed $14.6m AUM since it launched in 2022.
It has returned 18.1% since inception, versus 17% for its benchmark, the Russell 3000 Growth Health Care index, over the same period.
Charlie McCain, CEO of Harbor Capital, commented: “Working with HANetf provides us with a simple solution to bring our investment capabilities and brand into the European ETF market – all with an eye on remaining cost-effective, timely to market and able to benefit from a pre-established distribution network across Europe.”
Shareholders will vote on the proposals on 22 July with a view to implementing the changes by 6 August.
Harbor Capital Advisors is a subsidiary of Dutch asset manager Robeco, which is also lining up its entry into European ETFs expected sometime in Q3.
HANetf has been updating several of its ETFs in recent months, including overhauling its metaverse ETF into a ‘Web 3.0’ strategy.
The white-label market has sprung to life over the past couple of weeks with both Goldman Sachs ETF Accelerator and Waystone ETFs onboarding their first clients in Europe.
Hector McNeil (pictured), co-founder and co-CEO of HANetf, expects demand to continue to grow as global asset managers look to capitalise on the growth of the European ETF market.
“While the US ETF market remains the largest, Europe is rapidly catching up and asset managers are recognising this. White-label inquiries at HANetf are up 40% this year so far and we expect that number to continue growing,” he said.
