Clark Allen, head of product at Horizon Investments, and Mike Hagopian, institutional portfolio manager at Fidelity Investments, joined host Nate Geraci this week on ETF Prime to discuss how their firms are addressing specific needs in advisor portfolios.
Allen discussed Horizon’s rapid entry into the ETF space, launching nine ETFs with $1.2 billion in assets since January. He explained that Horizon identified gaps in the marketplace that existing products weren’t solving, particularly around goals-based investing.
At the heart of Horizon’s approach is a framework centered on three life phases: accumulation, preservation, and distribution. Allen highlighted the Horizon Manage Risk ETF (SFTY), designed for the preservation phase, which uses a volatility-based algorithm to capture market upside while protecting against catastrophic drawdowns for investors three to five years from retirement.
Allen also discussed the Horizon Digital Frontier ETF (YNOT), which simplifies complex themes by providing single-ticker exposure to AI, crypto, quantum computing, and nuclear energy.
Looking ahead to 2026, Allen said Horizon will emphasize the distribution phase to address longevity risk and explore liquid alternative strategies for accounts under $1 million.
Turning to systematic strategies, Hagopian discussed Fidelity’s Enhanced ETF lineup, which consists of eight ETFs with $25 billion in assets. These strategies sit between passive indexing and traditional active management, using proprietary models and nontraditional data sources like patent filings and earnings call transcripts while maintaining daily human oversight.
Hagopian highlighted the Fidelity Enhanced International ETF (FENI), which has attracted nearly $3 billion in inflows year-to-date. He outlined several drivers for the renewed interest in international equities, starting with diversification benefits. The top 10 names in the S&P 500 represent 35% to 40% of the index compared to just 10% to 15% in international developed markets.
International markets are also trading at historically wide valuation discounts to U.S. counterparts, according to Hagopian. Investors gain exposure to non-U.S. technology leaders like ASML Holding (ASML) and Advantest Corp., which supply critical components for the semiconductor and AI ecosystems. International equities also offer higher dividend yields at about 3% compared to 1% for the S&P 500.
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