Anthony Caruso runs product and strategy for Nomura Asset Management's US ETF business, which arrived largely intact from Macquarie when Nomura bought its US and European public business last December. He talks to Brad Roth about FRWD, the Nomura Transformational Technologies ETF — a strategy that ran as a separate account from 2018 and listed in January — and makes an argument most thematic managers do not: that innovation belongs in the core of a portfolio rather than bolted on as a tactical satellite, and that the way to own it is a concentrated book of twenty-five names rather than everything carrying the right label.
👤 Guest: Anthony Caruso, Managing Director and Head of ETFs and Product Strategy at Nomura Asset Management, previously at JP Morgan, Dimensional Fund Advisors and Macquarie
🎙️ Host: Brad Roth
📰 Published: 29 August 2026
🔴 YouTube | 🔗 Episode page | ⏱️ 23 min | ✅ Time saved: 11 min
Key Takeaways
The pitch is that innovation is a core holding, and the analogy is a baseball one
Roth raised a line about using Babe Ruth as a pitcher; Caruso's version was "Babe Ruth as a pinch hitter. Overall, is that really the best use?"
"We think from a reasonable allocation standpoint, if you're just looking at an overall equity allocation, 10 to 20% is sensible with that."
Two lenses, and the second one is what makes the book small
A secular theme screen for economic viability and duration, then bottom-up fundamentals on the companies inside the themes that survive
"So, you end up with we have just over 25 in the portfolio today."
Concentration is the point, not a side effect
"That's not the way that we want to approach markets." — on owning every stock that carries a theme label through a passive vehicle
The record he claims for it since 2018 is an outperformance of the NASDAQ 100 by about 200%, on a fund whose published benchmark is MSCI World Information Technology
The money is coming out of passive growth sleeves, not out of satellite budgets
Advisers are funding it from strategies tracking the NASDAQ 100 or Russell 1000 Growth
"It naturally diversifies you away from the mega cap tech stocks and opens up a little bit more across the AI supply chain versus just say the hyperscalers."
Volatility is treated as supply, not as risk to be traded around
"It's about 20 to 40% turnover."
"Now, volatility, it's going to happen." — and the managers use news-driven swings as entry points
The thesis is that the market underestimates innovation's magnitude, breadth and duration
His own framing for why: "We're just not built as humans to actually think that way."
Space and quantum are the next two areas the framework is assessing
"We're still in the infrastructure stage, right? We have to build the road."
The fee is 65 basis points, and the fund gathered about $260 million in its first six months
The Firm Behind the Ticker Is New to US ETFs and Not New to Anything Else
Caruso's route ran through a student-run endowment at the University of Dayton, then JP Morgan — where he was there for the launch of its ETF business — then Dimensional Fund Advisors, then Macquarie. The last of those moves turned into this one without him changing desks.
"In December of last year Macquarie's public business in the US and Europe got acquired by Nomura", bringing over the Delaware Investments and Ivy franchises along with equity, fixed income and multi-asset capabilities
Nomura has been in Japan and the US for a century each, and Caruso's brief is to build the ETF business outside Japan and Asia — the US first, Europe later
The US platform started at the end of 2023 and now has nine ETFs and just over a billion dollars
He described the firm as a leading global issuer with over 300 billion in assets — a figure well below Nomura Asset Management's own published AUM, and one worth treating as a slip rather than a datapoint
FRWD Is an Eight-Year Track Record That Only Recently Became an ETF
The fund listed on 13 January, but the strategy is older than the wrapper. The separate account behind it began at the end of November 2018, which is the period every performance claim in the conversation refers to.
"We actually were managing a separate account for going back to 2018. And so, in January, we converted this strategy to the ETF marketplace."
The purpose, in his words, is to give investors access to innovation in its simplest form
The managers are Gus Zinn and Brad Warden, whom he credits with over fifty years of combined experience inside a franchise he says has been investing in innovation for seventy-five years
What the portfolio is not is a technology sector fund
"And when you look at that portfolio today, it's not just technology. And I think that's something that often gets missed when investors think about AI or innovation, which really can happen across different industries."
He expects the sector mix to rotate across cycles — more healthcare at one point, more technology now
How a Universe Becomes Twenty-Five Names
Roth described the framework as two lenses, secular trend analysis and bottom-up research, narrowing sixty to seventy-five candidates down to the highest-conviction ideas. Caruso walked the sequence.
The theme screen comes first: which themes have economic viability, what their maturity and duration look like, and whether they are investable at all
Then the company work — valuation, durability, and the management teams — inside the themes that survive
"What this does then is say, okay, within that universe of securities that we deem as attractive, what are our highest conviction? Well, 20 to 30 stocks that we look to put in the portfolio."
The book today is just over twenty-five names; the fund's own page describes the target as a high-conviction portfolio of 20-30 positions
He was explicit that a broader, less concentrated version of the same framework runs in another vehicle. This one is the sharp end of it
Why Concentrate at All
Roth put the number to him directly — top ten holdings around 57% of the fund, a very different profile from something like QQQ — and asked what that buys. (Nomura's published top ten came to about 53% two days before the recording.)
"So, if you want to access innovation, right, you need to identify which ones are going to be the leaders and which are going to be the laggards. And you have to, I would say, put your money where your mouth is at the end of the day."
The alternative, as he framed it, is owning the whole label: "To your point, if you want to access any theme and you buy a passive strategy, it's going to own every stock potentially out there with that theme. That's not the way that we want to approach markets."
His evidence is the separate account's record: "We want to take advantage of that and I think it shows in the results where if you look over that period since 2018, the strategies outperform the NASDAQ 100 index by about 200%."
Worth noting against that claim: the fund's published benchmark is the MSCI World Information Technology index, not the NASDAQ 100
"So it's pretty meaningful from a return standpoint when you're able to take advantage of that innovation and obviously to your point it is concentrated and that's intentional."
The Bold Claim, and What He Offers For It
Roth pressed on the team's stated view that the market consistently underestimates innovation's magnitude, breadth and duration — a claim he called bold given how long technology has dominated the conversation. Caruso's answer was less about data than about the shape of the mistake.
His example was his own industry: every survey of the ETF market from a decade or two ago has since been surpassed, and the industry is beating last year's record again this year
"But we're not even seeing all the applications of AI and how that's going to play out."
The reference he reached for was a television show: "So, we were talking this morning, it's Black Mirror to me."
"I don't know if you've ever seen that show, Brad, but so it's all about futuristic and it's you can't believe that it's going to happen and then it ends up actually happening."
"We're just not built as humans to actually think that way."
What he says the portfolio managers do differently is think past the AI supply chain to second-order applications — industrials, logistics, healthcare, rare diseases, and what longevity does to GDP
"When one product comes out, it completely transforms. Look at the iPhone and all the different applications."
Core, Not Satellite — the Argument the Whole Fund Rests On
This is the part of the conversation the episode is named for. Caruso's position is that treating innovation as a tactical sleeve misuses it.
"Babe Ruth as a pinch hitter. Overall, is that really the best use?"
"For this strategy, we see it tends to sit within the growth side of a portfolio, mid and large cap stocks."
"We think from a reasonable allocation standpoint, if you're just looking at an overall equity allocation, 10 to 20% is sensible with that."
He is not against satellites; he is against making this one. Advisers who want driverless cars or robotics specifically should tack those on around a core
"But this is meant to be your set it and forget it access to innovation and within the strategy it will change what it's exposed to over time as it continues to evolve."
"Heavy AI infrastructure today, but of course that can change tomorrow as we continue to see buildouts in healthcare or industrials or you name the segment and opportunity set."
Where the Next Wave Comes From
Asked what follows the AI wave, Caruso named two areas and was careful about how early both are.
On AI itself: "But the different types of products that are going to happen, I think, we still have a long way to go and haven't even scratched the surface on those types of products."
On space: "And then from a space standpoint getting to exploration, that's all untested territory. We're still in the infrastructure stage, right? We have to build the road."
"After you build the road, you can have you name what after that."
Quantum is the third name on the list, assessed through the same theme framework — whose own constraint is investability, since a theme has to contain securities that can actually be bought
What Separates It From ARK and the Active Tech Funds
Roth named the competition. Caruso gave three points and a price.
The team and its record: "There's not many teams that have done this for 75 years."
The process — pairing the thematic lens with fundamental work, which he thinks is the unusual combination
Conviction: "There's I'm not going to speak to any specific competitor but there's some competitors that maybe won't take as much high conviction as we will."
"And look, we charge 65 basis points for this from a fee standpoint." — which he set against passive thematic products he says are significantly more expensive
The Other Side of the Trade
Roth asked how a concentrated innovation book handles the stretches when the market is punishing technology. Caruso's answer was that the horizon does the work.
"This isn't a short-term we're going to turn the portfolio 100%. It's about 20 to 40% turnover."
"Now, volatility, it's going to happen." — any hyperscaler headline or earnings report can shake the whole industry
What the managers do with it is treat the noise as investment opportunity: volatility creates mispricings, and mispricings are where they buy
"You're not going to see us shifting the portfolio overnight."
Where Advisers Are Finding the Money
The fund gathered about $260 million in six months. Caruso attributed that partly to the AI story and partly to the managers' following, and was specific about which sleeve of a model portfolio the allocation comes out of.
The source is passive growth: strategies tracking the NASDAQ 100 or Russell 1000 Growth
The pitch to those holders is innovation as a core holding they do not have to look at every single day
His argument for why the source matters is concentration. He ran through what market leadership has been called over the years — the four horsemen, FANG, the Magnificent Seven — and said an active manager working through the opportunity set is what the passive version cannot offer
"It naturally diversifies you away from the mega cap tech stocks and opens up a little bit more across the AI supply chain versus just say the hyperscalers."
The Rest of the Lineup
With the platform just over a billion dollars, Caruso flagged two other funds and a filing pipeline.
EMEQ, the emerging market strategy, launched in 2024 and now over $600 million, concentrated in Korea and Taiwan, and up more than 170% on his account. He said it pairs with FRWD for an investor whose allocation is otherwise predominantly US
HTAX, the high-yield municipal fund, at about $60 million, on a tax-equivalent yield he had looked at that morning of about 9%
His case for the asset class: default rates are generally lower than corporates and recoveries are higher
"And then new we've had a lot of filings come out recently." — three conversions announced the week before, a small and mid-cap equity strategy, and a Japan equity strategy run with Tokyo
"I would expect our lineup to look significantly larger by the end of the year."
Caruso's argument is narrower than it first sounds. He is not claiming innovation will keep working; he is claiming that the way most portfolios own it — a small tactical sleeve, sized as a bet, bought through a vehicle that holds everything carrying the right label — is the wrong way to own something that has driven the growth half of the market for decades. Whether twenty-five names at 65 basis points is the right answer to that is a separate question, and the only evidence offered for it is a separate-account record that has never been tested inside an ETF.
Products, Companies & Tools Mentioned
Nomura Asset Management (The guest's firm; a century old in both Japan and the US, nine US ETFs and just over $1 billion on the platform, building the ETF business out beyond Japan and Asia)
FRWD, the Nomura Transformational Technologies ETF (Listed 13 January 2026 out of a separate account that began 30 November 2018; about 25 holdings, 0.65%, and the fund's own page describes it as a high-conviction portfolio of 20-30 positions)
Macquarie (Its US and European public asset management business was acquired by Nomura last December, which is how this ETF team arrived)
Delaware Investments and Ivy (The legacy franchises that came over in that acquisition; the FRWD prospectus still names Delaware Management Company as the series manager)
QQQ (The host's comparison for concentration — a passive NASDAQ 100 tracker set against a 25-stock active book)
The Russell 1000 (Its growth sleeve, with the NASDAQ 100, is where Caruso says advisers are funding the allocation from)
EMEQ, the Nomura Focused Emerging Markets Equity ETF (Launched 2024, over $600 million, concentrated in Korea and Taiwan, and up more than 170% by his account)
HTAX, the Nomura National High-Yield Municipal Bond ETF (About $60 million, on a roughly 9% tax-equivalent yield he had looked at that morning)
ARK and BlackRock (The competition the host named — thematic and active technology funds)
JP Morgan Asset Management and Dimensional Fund Advisors (Where Caruso built ETF businesses before Macquarie; he was at JP Morgan for the launch of its ETF business)
Tesla (The host's aside on self-driving — a Model S he is thinking of trading for a Model Y with the newer computer — as his evidence of how fast the iteration has become)
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