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Thrivent Brings Small-Cap and Mid-Cap Value Strategies to the ETF World

MarketDash Editorial Team
17 days ago
Thrivent Asset Management launched two new ETFs on Monday by converting mutual funds, bringing its small-cap and mid-cap value stock-picking strategies into a more tax-efficient structure that's been attracting serious investor interest.

Thrivent Asset Management joined the ETF migration party on Monday, transforming two of its long-standing mutual funds into exchange-traded products. It's a move that makes plenty of sense when you consider how much money has been flowing into ETFs lately.

The Thrivent Small Cap Value ETF (TSCV) and Thrivent Mid Cap Value ETF (TMVE) started trading this week after shedding their mutual fund structure. TSCV launches with $146.74 million in assets and charges a 0.60% expense ratio, while TMVE arrives with $19.88 million under management and a 0.55% fee.

The conversion gives investors access to Thrivent's active stock-picking approach wrapped in a more tax-efficient package. Both ETFs hunt for undervalued companies that are showing improving business fundamentals and maintaining steady or rising returns on invested capital. It's value investing with a quality twist.

What's Under the Hood

The small-cap fund holds 61 stocks using a largely equal-weighted approach. Top positions include Cushman & Wakefield Plc (CWK) at 2.8%, Plymouth Industrial REIT Inc (PLYM) at 2.6%, and UMB Financial Corp (UMBF) at 2.6%. The strategy targets companies trading at less than 70% of their estimated intrinsic value, and analysts want to see upside potential that's two to three times the downside risk. That's a disciplined framework for avoiding value traps.

TMVE applies a similar philosophy to the mid-cap space. The portfolio spreads across 81 names, with M&T Bank Corp (MTB) leading at 2.7%, followed by U.S. Bancorp (USB) at 2.6% and Sysco Corp (SYY) at 2.2%. Management zeroes in on companies with stable or improving return on invested capital, using scenario-based valuation work to identify opportunities, according to the prospectus.

Here's an interesting detail: both strategies previously operated as open-end mutual funds available only to affiliated funds and carried no management fee. That changes under the ETF structure, which means performance comparisons going forward won't be apples-to-apples.

Mike Kremenak, President of Thrivent Mutual Funds, noted that the firm's extensive experience managing small-cap and mid-cap mandates now extends to its ETF lineup, giving investors more tools for building and diversifying portfolios. It's a sensible expansion for a firm that's been managing these strategies for years but wants to tap into the ETF market's momentum.

The move reflects broader industry trends, as asset managers recognize that many investors prefer the flexibility and tax advantages that come with ETF structures. For Thrivent, it's about meeting clients where they are while keeping the same fundamental investment approach intact.

Back to News

Thrivent Brings Small-Cap and Mid-Cap Value Strategies to the ETF World

MarketDash Editorial Team
17 days ago
Thrivent Asset Management launched two new ETFs on Monday by converting mutual funds, bringing its small-cap and mid-cap value stock-picking strategies into a more tax-efficient structure that's been attracting serious investor interest.

Thrivent Asset Management joined the ETF migration party on Monday, transforming two of its long-standing mutual funds into exchange-traded products. It's a move that makes plenty of sense when you consider how much money has been flowing into ETFs lately.

The Thrivent Small Cap Value ETF (TSCV) and Thrivent Mid Cap Value ETF (TMVE) started trading this week after shedding their mutual fund structure. TSCV launches with $146.74 million in assets and charges a 0.60% expense ratio, while TMVE arrives with $19.88 million under management and a 0.55% fee.

The conversion gives investors access to Thrivent's active stock-picking approach wrapped in a more tax-efficient package. Both ETFs hunt for undervalued companies that are showing improving business fundamentals and maintaining steady or rising returns on invested capital. It's value investing with a quality twist.

What's Under the Hood

The small-cap fund holds 61 stocks using a largely equal-weighted approach. Top positions include Cushman & Wakefield Plc (CWK) at 2.8%, Plymouth Industrial REIT Inc (PLYM) at 2.6%, and UMB Financial Corp (UMBF) at 2.6%. The strategy targets companies trading at less than 70% of their estimated intrinsic value, and analysts want to see upside potential that's two to three times the downside risk. That's a disciplined framework for avoiding value traps.

TMVE applies a similar philosophy to the mid-cap space. The portfolio spreads across 81 names, with M&T Bank Corp (MTB) leading at 2.7%, followed by U.S. Bancorp (USB) at 2.6% and Sysco Corp (SYY) at 2.2%. Management zeroes in on companies with stable or improving return on invested capital, using scenario-based valuation work to identify opportunities, according to the prospectus.

Here's an interesting detail: both strategies previously operated as open-end mutual funds available only to affiliated funds and carried no management fee. That changes under the ETF structure, which means performance comparisons going forward won't be apples-to-apples.

Mike Kremenak, President of Thrivent Mutual Funds, noted that the firm's extensive experience managing small-cap and mid-cap mandates now extends to its ETF lineup, giving investors more tools for building and diversifying portfolios. It's a sensible expansion for a firm that's been managing these strategies for years but wants to tap into the ETF market's momentum.

The move reflects broader industry trends, as asset managers recognize that many investors prefer the flexibility and tax advantages that come with ETF structures. For Thrivent, it's about meeting clients where they are while keeping the same fundamental investment approach intact.