weve all experienced how fragile the global supply chain is says engine no 1s eli horton who previously worked for hedgefund firm maverick capital activist fund engine no 1 is offering an exchangetraded fund that invests in companies supporting the relocalization of us supply chains in north america a transformation the firm expects to accelerate as a result of the covid19 pandemic the engine no 1 transform supply chain etf will begin trading under the ticker supp on wednesday according to eli horton the funds lead portfolio manager who last year joined the firms investment team from hedgefund firm maverick capital weve all experienced how fragile the global supply chain is horton said by phone we think companies will improve their competitive positioning by making economic decisions to relocalize their supply chains after years of turning to lowcost labor in regions such as asia in december engine no 1s chief executive officer jennifer grancio told marketwatch that the firm was leaning on hortons former hedgefund experience to help with its expansion of activelymanaged etfs funds targeting huge transformational investment opportunities seewhy engine no 1 has turned to exhedge fund talent to expand active etf lineup global supplychain disruptions during the pandemic resulted in lost income for many businesses according to horton as a result he said companies are now actively looking to adjust their supply chains so that manufacturing is closer to local design and demand the engine no 1 transform supply chain etf is investing across three core areas including manufacturing automation and innovation and critical transportation partners said horton in the area of automation and innovation the etf has exposure to rockwell automation inc rok a milwaukeebased company whose products and technology are embedded into almost every factory and plant floor according to horton as for manufacturing the fund holds two very critical suppliers of materials to manufacturing he said citing raleigh north carolinabased martin marietta materials inc mlm mlm and vulcan materials co vmc in birmingham alabama and in the area of transportation horton said the etf has exposure to canadian pacific cpt a railway that operates in north america industrial goods that will be needed to build out the supply chains have to travel by rail he said canadian pacific runs east to west across north america while its recent acquisition of kansas city southern means the company can also support businesses building out their supply chains from southern mexico to canada according to horton the holdings of engine no 1 transform supply chain etf will largely be in the us with the fund using a rigorous fundamental research process to identify companies that are the best expression of the theme and areas its targeting he said the activelymanaged etf has a fee of 075 yasmin dahya bilger head of etfs at engine no 1 said by phone that activelymanaged strategies and thematic investing are key growth areas in the etf market while investors had long equated etfs with marketcap passive investing she said that linkage has been fully broken over the past three years readactive vs passive why active etfs face competition from quasiactive smart beta funds in us stock market in thematic investing she said clients want satellite exposures in their portfolio to complement around their marketcap exposure the firms new fund is its third etf in the market after engine no 1 transform 500 etf vote and the activelymanaged engine no 1 transform climate etf netz well just be layering on these satellite exposures where i think were bringing the best of engine no 1 across our active investment and active ownership capabilities she said