Vident Investment Advisory, LLC (“VIA”) is a Delaware limited liability company formed in
March 2014. We have been providing investment advisory services since December 2014. VIA is
a wholly owned subsidiary of Vident Financial, LLC (“Vident Financial”).
Funds
VIA primarily provides a range of investment solutions as a sub-adviser to exchange-traded funds
registered under the Investment Company Act of 1940, as amended (“IC Act”) (“ETFs”). VIA also
acts as a sub-adviser to pooled investment vehicles structured as Undertakings for Collective
Investment in Transferable Securities (“UCITS”) and to other privately offered pooled investment
vehicles including business entities operating as hedge funds (“private funds”). Hereinafter, ETFs,
UCITS and private funds are collectively referred to as the “Funds.”
Included as ETF clients are the Vident ETFs, four exchange-traded funds which are series of ETF
Series Solutions (“ESS”) and distributed by ALPS Distributors, LLC (“ALPS”). VIA’s affiliate,
Vident Advisory, LLC (“VA”), serves as the Vident ETFs’ primary adviser. VIA and VA are not
affiliated with either ESS or ALPS.
VIA is responsible for trading portfolio securities and other investment instruments on behalf of
the Funds, including selecting broker-dealers to execute purchase and sale transactions, as
instructed by a Fund’s primary adviser or in connection with any rebalancing or reconstitution of a
Fund’s underlying investment index, subject to the supervision of the Fund’s primary adviser,
management company, and/or board of directors (or trustees), as applicable.
Funds may trade various combinations of any asset class or investment vehicle, including global
equities, fixed income, ETFs, mutual funds, money market funds, private funds, commodities,
futures, and liquid alternatives, as permitted by an underlying benchmark, index, or the disclosure
document of the Fund. VIA does not tailor its advisory services to the individual needs of investors
in the Funds. The Funds’ offering documents set forth their respective investment strategies,
guidelines, and restrictions. Prospective investors should review these documents carefully before
making any investment in the Funds. Unless otherwise noted herein, this brochure will focus its
discussion on the services VIA provides to separately managed accounts (“SMAs”).
Separately Managed Accounts
VIA provides discretionary investment sub-advisory services to SMAs via an agreement with a
third-party manager (“TPM”). VIA’s sub-advisory services are tailored to the individual needs of
each SMA account owner. VIA’s current discretionary sub-advisory SMA mandates include
laddered bond portfolios (“LBP”) and equity strategy SMAs (“ESMA”).
Laddered Bond Portfolios
VIA manages the LBP according to a customized fixed income strategy that is individually tailored
to meet the cash flow needs of each
SMA account owner according to the SMA’s investment
guidelines. The SMA may also place investment guidelines and/or restrictions on the account.
Equity Portfolios
VIA manages the ESMA based on an instructed investment strategy model determined by the TPM
and the SMA account owner, inclusive of any established investment guidelines and/or restrictions,
capital gains tax schedules, and other requirements established by the account owner. The concept
of ESMA include, when chosen by the SMA, the use of select environmental, governance, and/or
social screens chosen by the SMA and as implemented by VIA utilizing third-party providers’
investment criteria screens or the TPM’s own investment screens (or otherwise collectively
considered as “values-based investment” screens).
Account Management
Each SMA may trade various combinations of any asset class or investment vehicle, including
equities, American Depository Receipts (“ADRs”), fixed income securities, government securities,
ETFs (inclusive of the Vident ETFs), mutual funds, and money market funds.
As sub-adviser, VIA will work with the TPM to understand established investment guidelines
and/or restrictions, capital gains tax schedules, and values-based investment requirements of each
SMA. In turn, the TPM works with its client, the SMA account owner. VIA will monitor account
performance on an ongoing basis and will make changes to the investment portfolio as required by
changes in market conditions, fixed income security maturities, changes in the TPM’s investment
strategy model portfolio selected by the SMA account owner, and/or changes in the financial
circumstances of the SMA account owner (as relayed to VIA by the TPM). VIA will not work
directly with the SMA account owner, rather it will rely on coordination with the TPM on the
management of the account. Trading activity is influenced by the frequency of rebalances,
contributions, withdrawals, and fixed income security maturities (including call exercise).
VIA’s discretionary investment authority allows our firm to determine the specific securities and
the amount of securities to purchase, sell or exchange for the SMA. The SMA, through the TPM,
may request in writing that VIA make specific investments for the account, and the SMA has the
ability to impose investment restrictions.
ESMA is unable to receive initial public offering allocations due to unknown eligibility and
restrictions around “trading away” (as discussed further below in Item 12 – Brokerage Practices).
Please refer to a further discussion below in Item 8 – Methods of Analysis, Investment Strategies,
and Risk of Loss and Item 16 – Investment Discretion.
Wrap Fees
VIA does not participate in wrap fee programs.
Assets Under Management
As of December 31, 2022, VIA managed $6,678,390,435 on a discretionary basis and $0 on a non-
discretionary basis.