Virtus Investment Partners (NYSE: VRTS) is accelerating its shift toward active ETF management by converting two established Zevenbergen mutual funds into exchange-traded products. This strategic reorganization aims to provide institutional and retail investors with the same high-growth equity strategies previously housed in open-end funds, but within a more liquid and tax-efficient wrapper. By transitioning the Zevenbergen Growth Fund and the Zevenbergen Genea Fund into the Virtus Zevenbergen Innovative Growth ETF (ZINN) and the Virtus Zevenbergen Discovery Growth ETF (ZDIS), the firm is positioning its boutique manager, Zevenbergen Capital Investments (ZCI), to capture broader market demand for intraday tradability and increased portfolio transparency. This move underscores a growing trend in the asset management industry where specialized managers migrate legacy mutual fund assets into the ETF ecosystem to meet evolving investor preferences for structural flexibility and cost-effectiveness.
ZINN and ZDIS ETF Structure Implementation
The conversion process effectively reorganizes existing assets into two distinct tickers on the NYSE Arca. The Virtus Zevenbergen Innovative Growth ETF, trading under the ticker ZINN, is the successor to the Zevenbergen Growth Fund, which held $137.7 million in assets under management (AUM) as of June 30, 2026. This new vehicle seeks long-term capital appreciation by targeting a concentrated portfolio of companies across various capitalizations and life cycle stages that ZCI identifies as having strong growth prospects.
Simultaneously, the Zevenbergen Genea Fund, which reported $70.1 million in AUM as of June 30, 2026, has been reorganized into the Virtus Zevenbergen Discovery Growth ETF (ZDIS). This fund is designed to target long-term capital appreciation by investing in a concentrated portfolio of companies in the early stages of their life cycle, specifically those ZCI believes exhibit exceptional growth potential, often driven by technological advancements. Both ETFs will remain under the management of Zevenbergen Capital Investments LLC (ZCI), ensuring that the underlying investment philosophy and research-driven approach developed since the original funds' inception on August 31, 2015, remain intact. This transition allows the firm to maintain its specialized high-growth and technology equity strategies while utilizing the Virtus ETF Solutions platform to enhance distribution reach and structural accessibility for a wider range of market participants.
Strategic Migration of Zevenbergen Growth Strategies
The decision to migrate these specific funds into an ETF structure reflects a broader institutional push to modernize legacy product lineups. According to William J. Smalley, executive managing director of Virtus ETF Solutions, the introduction of ZINN and ZDIS is intended to expand the Virtus active ETF lineup by offering investors access to ZCI’s distinctive growth investing approach through a vehicle that provides intraday tradability, full transparency, and tax efficiencies. This suggests that Virtus is prioritizing the structural advantages of the ETF format to compete in a market increasingly dominated by active exchange-traded products.
Nancy Zevenbergen, CFA, president and chief investment officer of Zevenbergen Capital Investments, noted that the move recognizes long-term shareholders by providing increased transparency and access. ZCI, which was founded in 1987, specializes in identifying founder-led companies with strong financials and experienced management teams. By moving these strategies into the ETF space, ZCI and Virtus are testing whether the increased liquidity and transparency of the ETF structure can better serve the needs of investors seeking exposure to underappreciated, high-growth companies before they reach mainstream recognition. This reorganization leverages Virtus's multi-manager ETF sponsor model to scale boutique expertise through a more modern, scalable financial infrastructure.
Key Takeaways
- Virtus converted the Zevenbergen Growth Fund ($137.7M AUM) and Zevenbergen Genea Fund ($70.1M AUM) into the ZINN and ZDIS ETFs, respectively.
- Both new ETFs will continue to be managed by Zevenbergen Capital Investments LLC (ZCI), maintaining the original investment strategies.
- The transition provides investors with intraday tradability, full transparency, and tax efficiencies compared to the predecessor mutual fund structures.
FinanceInsyte's Take
In our view, this conversion is a calculated move by Virtus to defend its market share in the active management space by addressing the structural obsolescence of traditional mutual funds. By migrating $207.8 million in combined AUM from the Zevenbergen funds into the ETF format, Virtus is not just changing a ticker; it is upgrading the delivery mechanism for its boutique managers. This signals that even specialized, high-conviction growth managers like ZCI recognize that "transparency" and "intraday liquidity" are no longer optional features for modern capital allocators. We believe this move is a proactive attempt to prevent asset attrition to more modern competitors. For institutional investors, the ability to access ZCI’s concentrated, founder-led research through a tax-efficient ETF wrapper makes these strategies significantly more attractive for tactical portfolio adjustments.
Questions & Answers
How does the conversion impact the underlying investment strategy of the Zevenbergen funds?
The investment philosophy and portfolio management approach remain unchanged. Both the ZINN and ZDIS ETFs will continue to be managed by Zevenbergen Capital Investments LLC (ZCI), retaining the high-growth equity strategies and research processes used by the predecessor mutual funds.
What are the primary structural advantages of the new ZINN and ZDIS ETFs?
The transition to an ETF structure provides investors with three specific advantages: intraday tradability, full transparency of holdings, and enhanced tax efficiencies compared to the previous open-end mutual fund structure.
What specific market segments do the ZINN and ZDIS ETFs target?
ZINN focuses on a concentrated portfolio of companies across various capitalizations and life cycle stages with strong growth prospects. ZDIS targets companies in the early stages of their life cycle, often those driven by technological advancement.
What was the total AUM of the predecessor funds as of the most recent reporting date?
As of June 30, 2026, the Zevenbergen Growth Fund held $137.7 million and the Zevenbergen Genea Fund held $70.1 million, representing a combined AUM of $207.8 million being transitioned into the new ETF structures.
Source: Businesswire
