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Get A Bunch Of ETFs With This New ETF

Get A Bunch Of ETFs With This New ETF

In recent years, the ETF of ETFs has been increasingly popular with issuers of new exchange-traded funds. The latest entrant to that arena is the ClearShares OCIO ETF (NYSE: OCIO), which debuted Tuesday.

The new ETF was launched by ClearShares LLC, a unit of Clearbrook Global Advisors. “OCIO” stands for outsourced chief investment officer. OCIO, the ETF, is actively managed and holds passive and active ETFs.

“ClearShares OCIO ETF is a managed portfolio of active and passive, index-based ETFs, with active management focused on tactical asset allocation by a team of experienced investment professionals with multi-asset class, multi-market cycle experience,” according to a statement from New York-based ClearShares. “The Fund seeks to outperform a traditional 60/40 mix of global equity and fixed-income investments.”

Familiar Holdings

OCIO holds 30 ETFs, all but three of which are iShares or Vanguard products. The largest holding in the new ETF accounts for nearly 4.8 percent of the fund's weight and OCIO's top 10 holdings combine for about 47 percent of the ETF's weight.

Familiar domestic holdings in OCIO include the Vanguard Total Stock Market ETF (NYSE: VTI), Vanguard Growth ETF (NYSE: VUG) and the Vanguard S&P 500 ETF (NYSE: VOO).

OCIO's international holdings include the iShares Core MSCI Emerging Markets ETF (NYSE: IEMG), Vanguard Emerging Markets Stock Index Fd (NYSE: VWO) and the iShares Core MSCI EAFE ETF (NYSE: IEFA). All three of those funds are among this year's top asset-gathering ETFs.

Bottom line: Many of OCIO's holdings meet the definition of low-cost ETFs.

OCIO's Process

OCIO's management team combines active asset allocation with bottom-up research, risk analysis and top-down research to arrive at investment decisions.

The new ETF “integrates the cost advantages and transparency of the ETF structure with the experienced professional management, research and analytics of the traditional OCIO model,” according to ClearShares. “The Fund is an actively managed ETF of ETFs, holding a diverse portfolio of primarily passive index-based ETFs utilizing actively managed strategies when opportunities present themselves. It offers a potential core- or total-portfolio solution, with fees and minimums that may be less than other outsourced arrangements.”

The new ETF charges 0.67 percent per year, or $67 on a $10,000 investment.

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