Thrivent Expands Its Product Suite with Two New Active ETF Strategies

Thrivent recently expanded its product suite with two actively managed ETF strategies that bring established investment expertise and capabilities to areas where investors often look for portfolio exposure: domestic large-cap equities and fixed income. Thrivent Large Cap Stock ETF (NASDAQ: TLCE) applies an actively managed quantitative approach to U.S. large-cap investing, while Thrivent Securitized Income ETF (NASDAQ: TSIE) gives investors access to a specialized segment of the bond market.

Below, Mike Kremenak, president of Thrivent Funds, discusses the new ETFs, the investment strategies behind them and how they support Thrivent’s broader investment product strategy.

Why did Thrivent choose to launch these two ETFs now?
Investors and financial advisors increasingly want access to active strategies through the ETF structure. As we expand our product suite, we are being deliberate about where Thrivent’s investment capabilities can address a clear client demand and portfolio need. TLCE takes a quantitative approach to the core domestic large-cap asset class, while TSIE gives individual investors access to a specialized, unique area of fixed income that can help to further diversify portfolios.

Both strategies reflect our disciplined investment approach and focus on delivering long-term value to those we serve. They also make established Thrivent investment capabilities and asset classes available to investors through the ETF structure.

Why is active management important for these strategies?
Active management looks different in each fund. For TLCE, it takes the form of a portfolio manager-built systematic, quantitative process that helps the team identify opportunities and manage portfolio risks across a larger scale of holdings. For TSIE, it involves detailed analysis of the loans or assets supporting each security, the protections built into its structure and its position in the capital structure. In both cases, active management gives the portfolio teams the ability to respond as market conditions and risks change.

Across both funds, our investment professionals bring together research, portfolio construction and risk management as they seek to identify opportunities and help investors pursue their long-term financial goals.

For readers who may be newer to ETFs, why are ETFs appealing to investors and financial advisors?
There are several attributes that make ETFs appealing to investors:

• Flexibility: ETFs can be bought and sold throughout the trading day.
• Potential tax efficiency: The structure of an ETF may result in fewer taxable events compared with some other investment vehicles.
• Cost: ETFs can offer investors access to professionally managed strategies at a competitive cost.
• Portfolio fit: Like mutual funds, ETFs can provide exposure to a range of asset classes and strategies, helping investors build portfolios aligned with their financial goals.

Can you walk us through the Thrivent Large Cap Stock ETF and its investment approach?
TLCE is an actively managed ETF focused on U.S. large-cap companies. The portfolio team builds proprietary models that conduct quantitative analysis across a broad set of fundamental, market and risk data. Rather than replicating an index or following only a fundamental stock selection process, the team oversees the model that selects securities to construct a robust diversified portfolio while managing company, sector and factor risks.

Unlike an index-tracking strategy, TLCE gives the portfolio managers flexibility to select or exclude securities with certain attributes or exposures based on the models’ analysis rather than replicate every holding in its benchmark.

The fund is managed by Brian Bomgren, CQF; Noah Monsen, CFA; and Sharon Wang, CFA, FRM. Investors in the fund will experience the team’s quantitative capabilities and systematic approach to evaluating opportunities within the U.S. large-cap market.

What role could TLCE, a domestic large-cap equity strategy, play in an investor’s portfolio?
Domestic large-cap equities often serve as a core component of a diversified portfolio. TLCE provides that exposure through an actively managed quantitative process that evaluates companies differently from a traditional fundamental strategy. As a result, the fund will hold significantly more names and may complement other fundamental large-cap growth and value strategies within a broader equity allocation.

As with any investment, investors should consider their individual goals, risk tolerance and overall portfolio when evaluating whether the strategy is appropriate for them.

What is the role of TSIE, and what types of investments will it hold?
TSIE may complement traditional government and corporate bond holdings by providing diversified exposure to high-quality securities backed by mortgages, auto loans, corporate loans and other financial assets. Those underlying exposures can offer different sources of income, risk and return within a broader fixed-income portfolio.

TSIE’s emphasis on investment-grade securities, credit quality and disciplined risk management is intended to help investors access these opportunities through a professionally managed ETF. The portfolio management team, led by Jon-Paul Gagne and Chad E. Diefenderfer, CFA can adjust exposure across securitized asset classes, credit ratings, capital structures and duration as it evaluates changing risks and opportunities.

How does Thrivent decide when to add a fund to its investment product suite?
Our goal is not simply to add more products. We look for places where investors have a clear need and where Thrivent has the investment expertise to offer something meaningful. TLCE and TSIE meet those criteria. They expand our equity and fixed-income lineup while giving investors access to two distinct capabilities through the ETF structure.

For more information about Thrivent ETFs, including investment objectives, risks, charges and expenses, visit thriventETFs.com.

Investing involves risks, including the possible loss of principal. The prospectus and summary prospectus contain more complete information on the investment objectives, risks, charges and expenses of the fund, and other information, which investors should read and consider carefully before investing. Prospectuses and summary prospectuses are available at thriventETFs.com.

These ETFs are newly formed and has a limited operating history. Equity securities of large companies can be volatile and unable to respond quickly to new competitive challenges and may not be able to attain a high growth rate. Exposure to specific regions, sectors, or styles may increase volatility. Investments in debt securities are subject to interest rate, credit, and market risk. Mortgage-backed securities may also carry prepayment and extension risks.  U.S. government bonds are generally considered lower risk but are still subject to interest rate risk where bond values may decline as interest rates rise. These and other risks are described in the prospectus.

Diversification does not eliminate the risk of experiencing investment losses.
ALPS Distributors, Inc., member FINRA, is the distributor for Thrivent ETFs. Thrivent Distributors, LLC is the marketing agent and asset management services are provided by Thrivent Asset Management, LLC, an SEC-registered investment adviser. Thrivent Distributors, LLC and Thrivent Asset Management, LLC are subsidiaries of Thrivent, the marketing name for Thrivent Financial for Lutherans. ALPS Distributors, Inc. is not affiliated with Thrivent or any of its subsidiaries.

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