New products introduced in July included a socially responsible ETF from AdvisorShares and a closed-end municipal bond ETF from Van Eck, as well as a guaranteed income annuity from New York Life and a China currency bond fund from Guinness Atkinson.
In addition, IndexIQ brought out its first emerging market mid-cap ETF; Altegris launched a new macro strategy fund; a Franklin Templeton fund changed its name; Morningstar Direct introduced new functionality; and Dominick & Dominick selected the CAISfunds platform.
Here are the nine latest developments of interest to advisors:
1) Philippe Cousteau Jr. and AdvisorShares Develop Socially Responsible ETF
Social entrepreneur and environmental advocate Philippe Cousteau Jr., grandson of Captain Jacques-Yves Cousteau, and AdvisorShares Investments announced July 12 a partnership to develop the AdvisorShares Global Echo ETF (GIVE), a multimanager fund with an absolute return and sustainable investment mandate. The fund will make socially responsible, sustainable investments using a variety of specially selected money managers.
The Global Echo Foundation, a 501(c)(3) charitable foundation co-founded by Philippe Cousteau Jr., will provide funding solutions to many of the challenges facing the world community, from social issues impacting women and children to environmental conservation, as well as supporting social entrepreneurship. The Global Echo Foundation will be funded through a portion of the Global Echo ETF management fee.
2) Van Eck Introduces Market Vectors CEF Municipal Income ETF
Van Eck Global announced Wednesday that it launched Market Vectors CEF Municipal Income ETF (XMPT), the first ETF to specifically focus on closed-end municipal bond funds.
XMPT is intended to track, before fees and expenses, the performance of the S-Network Municipal Bond Closed-End Fund Index (CEFMX), an index composed of shares of municipal bond closed-end funds listed in the U.S. principally engaged in asset management processes to produce federally tax-exempt annual yield. The index methodology assigns a greater weight to closed-end funds trading at discounts, potentially enhancing yield and providing the opportunity for capital appreciation.
XMPT carries a gross expense ratio of 1.57% and a net expense ratio of 1.43%, and expenses (excluding interest expense, offering costs, trading expenses, taxes, extraordinary expenses and acquired fund fees and expenses) are capped contractually until September 1, 2012 at 0.40%. The fund expects to distribute a monthly dividend that, if properly reported as exempt-interest dividends, may not be subject to regular U.S. federal income tax.
3) New York Life Launches Guaranteed Future Income Annuity
New York Life Insurance Co. announced on July 11 the launch of its Guaranteed Future Income Annuity, a deferred income annuity that offers consumers an opportunity to create pensionlike retirement income at a time when employer-sponsored defined benefit plans are dwindling. The flexible premium product provides a way to allocate a portion of retirement savings to a future guaranteed income stream that can’t be outlived.
The product allows a policyholder to make an initial premium payment of at least $10,000 and set an income start date in the future, at which time they will begin receiving guaranteed income payments for the rest of their life. Between the initial premium date and the income start date, the policyholder can continue to make premium payments in smaller increments, and can defer or accelerate their income start date as personal needs change.
4) Guinness Atkinson Launches China Currency Bond Fund
Guinness Atkinson Asset Management, advisor to the Guinness Atkinson funds, recently announced the launch of the Renminbi Yuan & Bond Fund (GARBX), the first traditional open-end mutual fund to invest directly in bonds denominated in the Chinese currency. The fund will be managed by Edmund Harriss, the company's veteran China fund manager. The June 2011 issue of Asia Brief provides a detailed overview of the renminbi bond market.
The fund's investment strategy combines evaluation of global macroeconomic conditions with in-house credit analysis based on study of company fundamentals. The fund will employ proprietary modeling screens to support the portfolio management team's credit analysis. The strategy's active approach and structure as a mutual fund provides the portfolio management team with a high level of flexibility in executing buy and sell decisions in changing market conditions.
5) IndexIQ Launches First Emerging Market Mid-Cap ETF
IndexIQ launched the IQ Emerging Markets Mid Cap ETF (EMER) on the NYSE Arca platform on Wednesday. EMER seeks to replicate, before fees and expenses, the performance of the IQ Emerging Markets Mid Cap Index (IQMDEMG), a float-adjusted market cap-weighted index intended to track the overall performance of the mid-capitalization sector of publicly traded companies domiciled and primarily listed on an emerging market exchange.
EMER is the first ETF dedicated to providing access to mid-cap emerging market equities and will do so via a “pure play” approach; all the equities included in the fund’s underlying index will be listed on an exchange in a less developed market in the Americas, Europe, Asia, Africa and the Middle East. The fund will be diversified across both emerging market countries and industry sectors. As of May 31, 2011, the fund’s underlying index contained exposures to consumer discretionary (18.69%), financials (18.10%), industrials (15.88%), materials (13.28%), technology (9.15%) and more.
6) Altegris Announces Macro Strategy Fund Launch
Altegris announced July 12 the launch of the Altegris Macro Strategy Fund (MCRAX), which offers access for individual and professional investors to the global macro approach to investing through an actively managed mutual fund. Jon Sundt, president and CEO of Altegris, is co-portfolio manager of the fund.
Between January 1997 and March 2011, global macro as a category has experienced significantly lower volatility as measured by the Barclay Global Macro Index (6% on an annualized basis) when compared to the S&P 500 Index (16.5% annualized). In addition, over this same period, the global macro category achieved +9.7% annualized return, as represented by the Barclay Global Macro Index, compared with the S&P 500 Total Return Index’s +6% annualized return.
7) Templeton Income Fund Changes Name to Templeton Global Balanced Fund
Franklin Templeton Investments announced July 11 that the Templeton Income Fund has been renamed Templeton Global Balanced Fund. Available to U.S. investors, the fund seeks both current income and capital appreciation by investing in global stocks and bonds.
The fund allows investors access to both global equity and fixed income markets through a single fund, supported by insights from two investment teams. The Templeton Global Equity Group invests the equity portion; the Franklin Templeton Fixed Income Group invests the fixed income portion. In addition to identifying the individual stocks and bonds to invest in, managers collaborate to determine the fund’s asset allocation, employing a bottom-up assessment of current opportunities combined with top-down macroeconomic analysis to shift the overall asset allocation to take advantage of market inefficiencies.
8) Morningstar Direct Launches New Asset Allocation and Forecasting Functionality
Morningstar announced July 11 new asset allocation and forecasting functionality in Morningstar Direct, its Web-based global investment analysis platform for institutional investors. This new feature is a risk management tool for investors. It allows users to choose from a number of return distribution assumptions to model asset class behavior, so that they can optimize their portfolio allocations to take into account “fat-tailed” return distributions and measure downside risk.
9) Dominick & Dominick Selects CAISfunds Platform
Dominick & Dominick LLC, an independent securities firm established in 1870, recently announced that it has selected CAISfunds to broaden its menu of top-tier alternative investment funds. CAISfunds, a New York-based financial technology company, provides an independent alternatives investment platform to the global wealth management industry.
The CAISfunds platform will give Dominick advisors access to a diversified menu of top-tier alternative investment funds, portfolio management tools, streamlined execution and integrated reporting. CAISfunds conforms to Dominick’s current product platform and compliance protocol while integrating client positions with Pershing LLC, Dominick’s custodian.
Read last week’s Portfolio Products Roundup at AdvisorOne.com.