At a glance
- Shareholders of the predecessor mutual funds now own ETF shares, under a reorganization the firm intends to qualify as tax-free.
- For advisers, the practical change is the wrapper, not the holdings.
- The US Value Equity ETF holds roughly 33 companies selected from the 1,000 largest US-traded stocks, screened for quality businesses with attractive long-term earnings growth trading at deeply discounted valuations.
Lyrical Asset Management converted two value equity mutual funds holding more than $1 billion in combined assets into the US Value Equity ETF (LYR) and the International Value Equity ETF (LYRI).
Shareholders of the predecessor mutual funds now own ETF shares, under a reorganization the firm intends to qualify as tax-free. Lyrical said the conversions answer demand from its clients and from financial advisers for ETF access to active strategies. ETF Express reported the completed conversions.
For advisers, the practical change is the wrapper, not the holdings. Clients who held the two mutual funds now hold ETFs in the same strategies, and Lyrical cites greater tax efficiency, daily portfolio transparency, intraday trading and lower ongoing fund expenses.
“We run concentrated, low-turnover portfolios built for the long term, and the ETF structure is a natural fit for that approach,” said Andrew Wellington, Lyrical's chief investment officer and founder. He said the investment philosophy, the portfolio management team and the approach to identifying long-term opportunities are unchanged.
We run concentrated, low-turnover portfolios built for the long term, and the ETF structure is a natural fit for that approach.Andrew Wellington, chief investment officer and founder of Lyrical Asset Management
Two concentrated books, now in ETF wrappers
The US Value Equity ETF holds roughly 33 companies selected from the 1,000 largest US-traded stocks, screened for quality businesses with attractive long-term earnings growth trading at deeply discounted valuations. The International Value Equity ETF holds 25 to 40 companies drawn from roughly 1,500 large, developed-market stocks outside the US, with the same emphasis on quality and value.
The US strategy has been managed continuously since January 2009 and the international strategy since June 2019. Those track records now sit inside the ETF share classes rather than the mutual funds that held them.
Reported by the Issuers desk from ETF Express. Published . Corrections