But he hesitates to categorize the vehicles as smart-beta funds. “Regarding smart beta or strategic beta, I think many of these indexes and products linked to them tend to be single dimensional whether they’re based on dividends, volatility, fundamentals or other parameters. What Lattice is doing is far more comprehensive, and we view our indexes as effectively being asset-risk allocation,” Wojnar says.
The expense ratios for the four Lattice funds range from 35 to 65 basis points, and they’re distributed by ALPS Distributors Inc. The ETFs collectively had total assets of $77 million as of the end of March, and Lattice sees financial advisors as a big part of its growth plans.
“Financial advisors are a target market, and we think the first group of adopters will be more sophisticated advisors who deliberately take risk into account when constructing client portfolios,” says Wojnar, adding that he expects Lattice ETFs over time will find a home on various advisor platforms, including the wirehouses.
He notes that Lattice has one fund in registration with the Securities and Exchange Commission focused on U.S. real estate investment trusts. The company is also looking into other ETF ideas in the multi-asset class and fixed-income spaces.