Wells Fargo & Co.'s Wells Fargo Asset Management is thinking to launch its first-ever exchange-traded fund in the next three to six months, Bloomberg News reported Dec. 19, citing company executives. Specifically, the firm is weighing multifactor smart beta ETFs.
Wells recently acquired Los Angeles-based quant firm Analytic Investors LLC, which provided the company with passive and active multifactor offerings, according to the news story.
Analytic Investors President Harin De Silva told the news outlet that Analytic is looking for ways to differentiate from the ETFs already on offer by other fund providers. To this end, Wells Fargo intends to introduce so-called factor risk parity, a strategy for dividing asset classes in a portfolio based on the size of their price swings, Bloomberg reported, noting that Analytic Investors already uses this approach in its passive strategies.
Wells is also considering to start an active ETF, as well as fixed-income funds based on factors, according to the report.