NEUBERGER BERMAN LAUNCHES THREE ACTIVELY MANAGED ETFS MARKING THE NEXT EVOLUTION OF THEMATIC INVESTING
NEW YORK, April 7, 2022 /PRNewswire/ — Neuberger Berman, a private, independent, employee-owned investment manager, announced the launch of its first-ever actively managed ETFs. The three new ETFs will invest in companies related to the following distinct thematic megatrends: technology disruption, digitally connected consumers, and infrastructure-enabling decarbonization. Managed by Neuberger Berman, the ETFs are an extension of the firm’s thematic equity investment capabilities utilizing traditional fundamental equity research along with alternative data capabilities and consideration of material Environmental, Social and Governance (ESG) factors.
“These new ETFs, a first for our firm, deliver Neuberger Berman’s thematic equity expertise to a broad investor base,” said Joseph Amato, Chief Investment Officer and President, Neuberger Berman.
Neuberger Berman currently manages $18 billion in thematic equity investments for global clients (as of 12/31/21). These ETFs are designed to broaden access for individual investors and their advisors.
The three new ETFS are:
Neuberger Berman Connected Consumer ETF (NYSE Arca: NBCC) seeks to provide investors with access to the companies that are potential beneficiaries of the emergence of Generation Y and Z as the dominant consumers. Over the coming 15 years, the digitally native cohort totaling 3.5 billion people are expected to grow their spending by 29% to 54%, and to represent 81% of total global disposable income by 2050.1 The team’s data science capabilities will be utilized to evaluate the web search and spending tendencies of millions of consumers, and the call transcripts and filings of over 4,000 public companies daily to identify the opportunities that appear best positioned for mass adoption in the digital age. NBCC is managed by Kevin McCarthy, John San Marco, Kai Cui, Timothy Creedon and Hari Ramanan.
Neuberger Berman Carbon Transition & Infrastructure ETF (NYSE Arca: NBCT) seeks to invest in companies that are focused on or are transitioning their business to be focused on one or more of the following themes: (1) low-carbon resources (i.e., issuers focused on producing renewable energy, such as solar, wind, geothermal and green hydrogen, and the related storage and transport of these energies); (2) electrification (i.e., issuers that help enable the replacement of technologies that use higher carbon-emitting fuels with those that use low-carbon resources as a source of energy, including those that support smart grid and electric vehicle-charging solutions as well as electricity transmission and distribution that help expand usage of low-carbon solutions); and (3) carbon reduction solutions (i.e., issuers that directly facilitate the carbon reduction goals of infrastructure owners, including innovative raw materials, industrial gases, engineering and construction service providers, environmental services providers, and environmental technology providers). Fifty percent of global electricity is expected to be generated by renewables by 2050, representing an expected $50 trillion investment opportunity as the underlying infrastructure is revolutionized.2 NBCT is managed by Ronald Silvestri, Jared Mann, James Tyre, Timothy Creedon and Hari Ramanan.
Neuberger Berman Disrupters ETF (NYSE Arca: NBDS) seeks to invest in companies pursuing disruptive growth agendas that the team believes will shape the future and has the ability to invest globally across market capitalizations. Eschewing traditional sector classification, the fund will instead utilize a disciplined process to seek highly innovative companies consistent with a longer-term investment horizon. By using machine learning, language processing and cloud computing techniques, the portfolio team will have access to daily analysis on six terabytes of data, including SKU-level transaction data, search data and conference call transcripts, complementing its fundamental analysis to result in a rigorously developed and highly targeted portfolio of roughly 30 companies. Neuberger Berman has managed strategies focused on disruptive growth companies since January 2015 with $473 million in AUM (as of 12/31/21). Rick Bradt and Jason Tauber will manage the Disrupters ETF.
“Thematic strategies aim to identify and invest in long-term economic shifts and require an extremely rigorous, research-based approach,” said Hari Ramanan, CIO of Global Research Strategies at Neuberger Berman. “We are bringing together the data science, local market expertise, active management, and the corporate engagement tools that Neuberger Berman has cultivated in order to develop what we view as the best-in-breed thematic offerings, in a widely available ETF structure with the potential for tax efficiency.”
1. United Nations: World Population Prospects (2030 forecast for % of global population born between 1980 and 2010). FundStrat, U.S. Census, Neuberger Berman.
2. Net Zero by 2050: A Roadmap for the Global Energy Sector,” International Energy Agency, 2021. “Making Missions Possible: Delivering a Net Zero Economy,” Energy Transitions Commission, September 2020.
About Neuberger Berman
Neuberger Berman, founded in 1939, is a private, independent, employee-owned investment manager. The firm manages a range of strategies—including equity, fixed income, quantitative and multi-asset class, private equity, real estate and hedge funds—on behalf of institutions, advisors and individual investors globally. With offices in 25 countries, Neuberger Berman’s diverse team has over 2,400 professionals. For eight consecutive years, the company has been named first or second in Pensions & Investments Best Places to Work in Money Management survey (among those with 1,000 employees or more). In 2020, the PRI named Neuberger Berman a Leader, a designation awarded to fewer than 1% of investment firms for excellence in Environmental, Social and Governance (ESG) practices. The PRI also awarded Neuberger Berman an A+ in every eligible category for our approach to ESG integration across asset classes. The firm manages $460 billion in client assets as of December 31, 2021. For more information, please visit our website at www.nb.com.
(Americas) Alex Samuelson, 212 476 5392, [email protected]
An investor should consider each Fund’s investment objectives, risks, fees and expenses carefully before investing. This and other important information can be found in each Fund’s prospectus or summary prospectus, which you can obtain by calling 877.628.2583. Please read the prospectus or summary prospectus carefully before making an investment.
Information (including holdings and portfolio characteristics) is as of December 31, 2021 unless otherwise indicated and is subject to change without notice.
The Funds are new with no operating history to evaluate. There can be no assurance that the Funds will achieve their investment objective. The Funds’ investment strategies incorporate the identification of thematic investment opportunities, and their performance may be negatively impacted if the investment manager does not correctly identify such opportunities or if the theme develops in an unexpected manner.
There can be no guarantee that the Portfolio Managers will be successful in their attempts to manage the risk exposure of the Funds or will appropriately evaluate or weigh the multiple factors involved in investment decisions, including issuer, market and/or instrument-specific analysis, valuation and environmental, social and governance (ESG) factors.
All ETF products are subject to risk, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions, including adverse issuer, political, regulatory, market, economic or other developments that may cause broad changes in market value, public perceptions concerning these developments, and adverse investor sentiment. To the extent the Funds invest in securities of small-, mid-, or large-cap companies, they take on the associated risks. Because the prices of most growth stocks are based on future expectations, these stocks tend to be more sensitive than value stocks to bad economic news and negative earnings surprises. An individual security may be more volatile, and may perform differently, than the market as a whole.
Unlike mutual funds, ETF shares are purchased and sold in secondary market transactions at negotiated market prices rather than at net asset value (“NAV”) and as such ETFs may trade at a premium or discount to their NAV. As a result, shareholders of the Funds may pay more than NAV when purchasing shares and receive less than NAV when selling Fund shares. ETF shares may only be redeemed at NAV by authorized participants in large creation units. There can be no guarantee that an active trading market for shares will develop or be maintained or that the Funds’ shares will continue to be listed. The trading of shares may incur brokerage commissions. The Funds have a limited number of Authorized Participants. To the extent they exit the business or are otherwise unable to proceed in creation and redemption transactions with the Funds and no other Authorized Participant is able to step forward to create or redeem, shares of the Funds may be more likely to trade at a premium or discount to NAV and possible face trading halts or delisting. Unexpected episodes of illiquidity, including due to market factors, instrument or issuer-specific factors and/or unanticipated outflows, could have a significant negative impact on the Funds’ NAV, liquidity, and brokerage costs. To the extent the Funds’ investments trade in markets that are closed when a Fund is open, premiums or discounts to NAV may develop in share prices.
Foreign securities, including emerging markets, involve risks in addition to those associated with comparable U.S. securities. Additional risks include exposure to less developed or less efficient trading markets; social, political, diplomatic, or economic instability; trade barriers and other protectionist trade policies (including those of the U.S.); significant government involvement in an economy and/or market structure; fluctuations in foreign currencies or currency redenomination; potential for default on sovereign debt; nationalization or expropriation of assets; settlement, custodial or other operational risks; higher transaction costs; taxes; and less stringent auditing, corporate disclosure, governance, and legal standards. Changes in currency exchange rates could adversely impact investment gains or add to investment losses. In addition, the Chinese investment and banking systems are materially different from many developed markets, which exposes the Funds to significant risks that are different from those in the U.S.
High public debt in the U.S. and other countries creates ongoing systemic and market risks and policymaking uncertainty. The COVID-19 pandemic has negatively affected and may continue to affect the economies of many nations, individual companies and the global securities and commodities markets. This has impacted and may continue to impact the issuers of the securities held by the Funds.
Additional Risks for Neuberger Berman Carbon Transition & Infrastructure ETF
Carbon transition companies may be more volatile than more established companies. If government policies and incentives for reducing greenhouse gas emissions are reduced or eliminated, the demand for the services provided by Carbon transition companies may be negatively impacted. Infrastructure companies may be adversely affected by a variety of factors that impact their business or operations, including higher than expected costs in connection with projects, costs associated with environmental and other regulations, the effects of economic slowdown and surplus capacity, increased competition from other providers of services. To the extent the Fund invests more heavily in particular sectors, its performance will be especially sensitive to developments that significantly affect those sectors. Individual sectors may be more volatile, and may perform differently, than the broader market.
The Fund may engage in active and frequent trading and may have a high portfolio turnover rate, which may increase the Fund’s transaction costs.
Additional Risks for Neuberger Berman Disrupters ETF
The Fund will invest in disruptive technologies or companies applying such technologies. In some cases, it may invest at early and perhaps speculative stages of development, when various consequences cannot necessarily be foreseen. To the extent the Fund invests more heavily in particular sectors, its performance will be especially sensitive to developments that significantly affect those sectors. Individual sectors may be more volatile, and may perform differently, than the broader market.
The Fund is classified as non-diversified. As such, the percentage of the Fund’s assets invested in any single issuer or a few issuers is not limited as much as it is for a Fund classified as diversified. Investing a higher percentage of its assets in any one or a few issuers could increase the Fund’s risk of loss and its share price volatility, because the value of its shares would be more susceptible to adverse events affecting those issuers.
Additional Risks for Neuberger Berman Next Generation Connected Consumer ETF
The success of many of the companies held by the Fund will be tied to the successful development, advancement, use or sale of products, processes or services related to connectivity-based consumerism, including 5G and future generations of mobile network connectivity and technology. Although the Fund seeks to invest in such companies, revenues or profits from such technologies may not materialize. To the extent the Fund invests more heavily in particular sectors, its performance will be especially sensitive to developments that significantly affect those sectors. Individual sectors may be more volatile, and may perform differently, than the broader market.
The Fund may engage in active and frequent trading and may have a high portfolio turnover rate, which may increase the Fund’s transaction costs.
These and other risks are discussed in more detail in each Fund’s prospectus. Please refer to each Fund’s prospectus for a complete discussion of each Fund’s principal risks. This material is general in nature and is not directed to any category of investors and should not be regarded as individualized, a recommendation, investment advice or a suggestion to engage in or refrain from any investment-related course of action. Neuberger Berman is not providing this material in a fiduciary capacity and has a financial interest in the sale of its products and services. Investment decisions and the appropriateness of this material should be made based on an investor’s individual objectives and circumstances and in consultation with his or her advisors. Accordingly, “retail” retirement investors are not the intended recipients of this material as they are expected to engage the services of an advisor in evaluating this material for any investment decision. If your understanding is different, we ask that you inform us immediately.
The “Neuberger Berman” name and logo are registered service marks of Neuberger Berman Group LLC. The individual fund names in this piece are either service marks or registered service marks of Neuberger Berman Investment Advisers LLC, an affiliate of Neuberger Berman BD LLC, member FINRA.
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