This week in new portfolio products, UBS announced two Internet ETNs, and Ariel went international and global with new portfolios. Also, one of IndexIQ’s funds got a four-star Morningstar rating for its three-year anniversary, and Forward Management added no-load investor shares to three of its funds.
Here are the four latest developments of interest to advisors:
1) UBS Launches 2 IPO ETNs Linked to 20 Internet Stocks
UBS Investment Bank announced that Thursday was the first day of trading on the NYSE Arca for two ETRACS ETNs linked to the performance of the UBS Internet IPO Index (NETIPO). ETRACS ETNs are senior, unsecured, unsubordinated debt securities designed to track the total return of a specific market index. The ETRACs Internet IPO ETN (EIPO) provides exposure to the index performance, while the Monthly 2xLeveraged ETRACS Internet IPO ETN (EIPL) provides a monthly compounded two times leveraged exposure to the index performance.
The index is intended to measure, on a total-return basis, the performance of a subset of Internet-related companies listed on the NYSE or NASDAQ that satisfy specified market capitalization and other eligibility requirements, and provides exposure specifically to those Internet-related companies that have been publicly traded for less than three years. Standard & Poor’s Financial Services LLC serves as the calculation agent for the Index.
Both Internet IPO ETNS are linked to a benchmark index currently consisting of 20 holdings representing the latest generation of Internet-related stocks such as LinkedIn, HomeAway, Pandora Media and OpenTable. Index construction allows for the addition of new Internet-related companies within weeks after their IPOs, and a monthly index rebalancing feature and 3-year age limit ensure that the companies in the index remain up to date and relevant.
2) Ariel Investments Launches International and Global Portfolios
Ariel Investments, LLC announced Wednesday the launch of Ariel’s new international and global strategies. In conjunction with this announcement, Ariel also revealed that Rupal J. Bhansali has been appointed as senior vice president and CIO of international equities, effective this fall, to manage the new portfolios for separately managed account clients and mutual fund shareholders. She will be reporting to Ariel founder and CEO John W. Rogers, Jr.; she and the international team will be based in New York.
Prior to joining Ariel Investments, Bhansali spent 10 years with MacKay Shields where she was senior managing director, portfolio manager and head of international equities. During her tenure, she managed both institutional and retail portfolios, including the 5-star Morningstar-rated Mainstay International Equity Fund (MSIIX). Bhansali has held various roles at investment firms including Soros Fund Management and Oppenheimer Capital.
3) IQHIX Hedge Fund Replication Mutual Fund Receives 4-Star Morningstar Rating
IndexIQ announced Tuesday that, based on its three-year track record as of June 30, its IQ Alpha Hedge Strategy Fund (IQHIX, institutional share class; IQHOX, investor share class) was given a 4-star overall Morningstar rating and was ranked in the top 2% of the 71 funds in the multialternative category based on risk-adjusted performance.
According to IndexIQ, the fund is the first no-load, open-end mutual fund designed to replicate broad-based hedge fund performance characteristics. It uses a proprietary rules-based methodology to replicate the returns of six major hedge fund strategies: equity long/short; global macro; emerging markets; fixed income arbitrage; equity market neutral; and event driven. Alpha is sought by optimizing the relative index weights among these six hedge fund strategies.
The fund seeks to achieve investment results that correspond to the total return of the IQ Alpha Hedge Index; the objective of the index is to provide superior returns with lower volatility relative to the Standard & Poor’s 500.
4) Forward Introduces No-Load Investor Shares for 3 Real Estate and Infrastructure Funds
Forward Management, LLC announced Wednesday the introduction of a new investor share class for three of its funds in the real estate and infrastructure category: the Forward International Real Estate Fund (FFIRX), the Forward Real Estate Long/Short Fund (FFSRX), and the Forward Global Infrastructure Fund (FGLRX).
The new investor shares carry no sales load. They also offer lower investment minimums than the funds’ existing no-load institutional share class, enabling individuals to invest with as little as $500.
The three Forward real estate funds with a newly introduced investor share class are:
- The Forward Global Infrastructure Fund, which takes an unusually broad view of the infrastructure sector. The fund invests in the physical structures and networks that provided necessary services, such as transportation and communications networks, utilities, energy storage and transportation. In addition to investing in the building blocks of urban development around the world, the fund also seeks opportunities in related companies, such as providers of raw materials and infrastructure services. The lead portfolio manager is Aaron Visse.
- The Forward International Real Estate Fund, which invests in high-quality commercial and residential real estate companies in Asia, Australia, Europe, Canada and Latin America. The fund’s lead manager, Michael McGowan, blends on-the-ground assessment and quantitative analysis to identify investment opportunities.
- The Forward Real Estate Long/Short Fund, which uses a value-driven approach to invest in high-quality U.S. REITs and real estate operating companies. Forward’s Ian Goltra is lead portfolio manager for the fund.
Read last week’s Portfolio Products Roundup at AdvisorOne.com.