MutualFundWire.com: A $641B-AUM Firm and a $17B-AUM Firm Team Up
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Tuesday, November 09, 2021

A $641B-AUM Firm and a $17B-AUM Firm Team Up


A $640.5-billion-AUM asset manager and a $17.3-billion-AUM asset manager (as of September 30) are teaming up in the ETF space.

John W. Rogers, Jr.
Ariel Investments
Founder, Chairman, Co-CEO, Chief Investment Officer
Last week, Rick Wurster (president of the Charles Schwab Corporation), John Rogers (founder, chairman, co-CEO, and chief investment officer of Ariel Investments, LLC), and Malik Sievers (head of ESG strategy at Schwab Asset Management) revealed that Schwab and Ariel are partnering to launch the Schwab Ariel ESG ETF (SAEF on the NYSE Arca) on November 16. Charles Schwab Investment Management, Inc. will serve as the new ETF's investment advisor, while Ariel will be the fund's subadvisor.

The ETF will be an active, smid cap strategy, and it will use the NYSE Group's NYSE Proxy Portfolio Methodology to be a translucent ETF. Rogers and Ken Kuhrt, executive vice president of Ariel will PM the fund, which will come with an expense ratio of 59 basis points.

Other service providers to the new fund will include: Deloitte & Touche LLP as its independent accounting firm; SEI Investments Distribution Co. as its distributor; and State Street Bank and Trust Company as its accountant, custodian, and transfer agent.

Rogers puts the pending launch in the context of Ariel's "long-standing relationship with Schwab." The new ETF, he says, will be powered by Ariel's "values-based, high conviction ESG approach."

Sievers notes that the new fund will be Schwab's "first proprietary ESG fund."

"We believe in a more rigorous and thoughtful approach to ESG investing that uses proprietary analysis to gain a nuanced view of ESG risk, instead of relying solely on third-party rating system," Rogers states. "As long-term investors, we are driven by dialogue, not dictates. As a firm, we consistently engage with portfolio company management teams to address ESG issues deemed material to their financial health."


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