In the last two years, investors have seen a global economic shutdown, unprecedented liquidity, a reopening trade, and now, incredible inflation and geopolitical strife. This is where active management can come into play.
Dan Hughes, vice president of distribution at Vaughan Nelson, said that a fund like the Natixis Vaughan Nelson Mid Cap ETF (VNMC) “has been able to navigate those markets.” VNMC is a “fundamental bottom-up research-driven” diversified portfolio of 25 to 30 stocks. According to Hughes, “being highly active [and] having a fundamental valuation bias with what we’re looking for” has allowed Vaughan Nelson “to take advantage of the market.”
True Active, True Diversification
Speaking with NYSE’s Judy Shaw at Exchange: An ETF Experience 2022, Hughes said that one of the things that investors from the largest institutions to the individual retail clients are looking for right now “is true active management and true diversification.”
Historically, the S&P 500 was a broadly diversified benchmark. But according to Hughes, “today, that’s not really the case.”
“The top seven holdings have become a singular monolithic trade; large-cap tech growth,” he said. “So, that diversification benefit has slowly deteriorated over the last couple of years.”
So, to “really take advantage of the marketplace,” Hughes said that he “truly believe[s] in active management.”
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