This is an actively managed ETF targeting US small- and mid-cap (SMID) core assets. It uses a quantitative model together with fundamental analysis to select stocks with strong earnings momentum.

It suits investors who want to add small- and mid-cap exposure to a large-cap-centered portfolio and who trust the stock selection value of active management.

It is an ETF run by Allspring using an active (actively managed) approach.

The fund first screens for small- and mid-cap stocks with strong earnings momentum and financial soundness using a quantitative model. The management team then re-verifies the candidates through fundamental analysis to build a concentrated portfolio of around 50 holdings. Most of its net assets are allocated to domestic small- and mid-cap stocks, and a portion is also invested in shares of developed-market foreign issuers (including ADRs).

• Active management combining quantitative and fundamental analysis
• A core portfolio concentrated in around 50 holdings

Assets under management (AUM) stand at $340.2M, and the total expense ratio is 0.38% per year.

Given the nature of the small- and mid-cap category, volatility is higher than for large caps, and relative performance tends to shift with interest rates and the economic cycle. Short-term performance since the recent listing has been highly sensitive to market conditions.

As a newly listed ETF, its fund flow history is still short, and this is a period in which investor sentiment toward small and mid caps and changes in the interest rate environment can affect inflows and outflows.

Its strength is the stock selection value of active management, while the short track record and the volatility typical of small and mid caps are seen as drawbacks.

Comparable funds in the same small- and mid-cap category include BLCR, a large actively managed core ETF by asset size, as well as EAGL, which follows a concentrated strategy, and LCAP. These differ in fund sponsor, fee level, and asset size. For passive diversification across the small- and mid-cap market, a low-fee passive ETF tracking a Russell 2500 family index can serve as a direct substitute. Investors who prefer to focus on a large-cap core can also consider large-cap active ETFs such as AVLC or OAKM.

Here are the points to review before investing in ASCE. As a newly listed active ETF, its track record, volatility characteristics, and stock concentration should be checked before making an investment decision.

The high volatility typical of small and mid caps and the short track record are near-term risk factors. Given the nature of active management, there may be periods of underperformance versus the benchmark.

It is an option worth considering for investors who want to add active small- and mid-cap exposure to a large-cap-centered portfolio. However, given the short track record, starting with a small amount is recommended.