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Jensen Investment Management Prepares New Quality ETF

Jensen Investment Management, a shop focused on quality ETF offerings, has filed for a new index-based quality ETF. The firm, which already offers active funds like the Jensen Quality Growth ETF (JGRW C+), can now expand its reach to a broader audience with its passive fund.Key Takeaways: Jensen Investment Management’s new quality ETF will charge a 25 basis point fee for its exposure. The fund crafts a list of quality stocks, screening for firms with at least a 15% return for 10 consecutive years. It joins other quality ETFs like QINT, QGRO, and VFLO, which also utilize VettaFi-powered indexes. The Jensen Quality Index ETF, which has yet to receive a ticker, is right now poised to charge a 25 basis point fee. According to the firm’s SEC filing, it will apply a “non-discretionary” rules-based methodology. The fund’s underlying index, the Jensen U.S. Quality Index, pulls from the VettaFi U.S. Equity 3000 Index to construct its portfolio. Specifically, the index screens the initial universe for firms generating a return of 15% or more for at least 10 consecutive fiscal years. It then ranks the qualifying equities by market cap, selecting the 100 largest names as constituents. Finally, these components are weighted once more, this time based on free-float market cap. Jensen’s new offering will join a competitive space populated by other VettaFi-linked quality funds. Similar VettaFi-linked strategies include the American Century U.S. Quality Growth ETF (QGRO) and the American Century Quality Diversified International ETF (QINT B+). QGRO tracks the American Century U.S. Quality Growth Index and charges a 29 basis point fee. QINT tracks the American Century Quality Diversified International Equity Index and charges a slightly higher fee of 34 bps.Quality ETF Offerings to Expand With New Jensen Investment FundMeanwhile, investors can also capture quality exposure with a slightly different spin from a fund like VFLO. Where QGRO looks to growth and QINT looks abroad, VFLO leans on free cash flow to assess firms. The VictoryShares Free Cash Flow ETF (VFLO B+) charges a 39 basis point fee to track an index that highlights companies with high free cash flow. The strategy has driven VFLO’s strong 21.9% YTD return per ETF Database data. The new quality ETF from Jensen Investment Management arrives at a time when ETFs are more popular than ever. Flexible, tradable, and transparent, ETFs can play a key role in satellite, core-plus, or even core slots in many portfolios. For more news, information, and analysis, visit the Thematic Investing Content Hub. Vettafi.com is owned by VettaFi LLC (“VettaFi”). VettaFi is the index provider for the QGRO, VFLO, and QINT, for which it receives an index licensing fee. However, QGRO, VFLO, and QINT are not issued, sponsored, endorsed, or sold by VettaFi. VettaFi and its affiliates have no obligation or liability in connection with the issuance, administration, marketing, or trading of QGRO, QINT, and VFLO.

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