December 3, 2011

Top Portfolio Products: Invesco Sponsors App; Van Eck Launches Index Firm

In addition, Forward Management introduces new share class for fund; SEI implements new fund tax structure

New products introduced over the last week include a new ETF app to be sponsored by Invesco; a new market vectors index firm launched by Van Eck; and a new no-load investor share class for Forward Management’s Select Income Fund. In addition, SEI has put in place a new tax management structure for its Large-Cap Fund and

Here are the latest developments of interest to advisors:

1) Invesco PowerShares Secures Rights as Exclusive Sponsor of NASDAQ OMX ETF App

Invesco PowerShares Capital Management LLC announced Thursday that it has secured rights to be the exclusive sponsor of the NASDAQ OMX QFOLIO for ETFs app. The new ETF app is free, and is an intuitive tool to search, filter, and track the entire universe of U.S.-listed ETFs.

The app provides fast access to ETF product information and performance statistics in an easy-to-use interface. Investors can screen, compare, chart and watch their favorite ETFs across all issuer platforms. Initially available for the iPhone, iPad and Android versions are planned for introduction at a future date.

2) Van Eck Global Begins Self-Indexing With the Launch of Market Vectors Index Solutions GmbH

New York-based asset manager Van Eck Global announced Wednesday the launch of Market Vectors Index Solutions GmbH (MVIS) and the company’s new index website, marketvectorsindices.com. The Frankfurt, Germany-based MVIS will develop, market and license the market vectors indices, which currently underlie many of Van Eck Global’s ETFs.

MVIS launches with about $4 billion in investor assets tied to its indexes. The firm's indexing methodology emphasizes investability, liquidity, and diversification and its indexes are currently used by 15 ETFs.

The current suite of Market Vectors Indices spans several asset classes, including commodity, international equity and international fixed income markets. MVIS has assumed ownership of the existing Market Vectors Indices that had been previously owned by 4asset-management.

"The launch of MVIS is an important step for Van Eck Global," said Jan van Eck, Principal and CEO of Van Eck Global, in a press release. "Generally speaking, there has been a shift from theoretical benchmarks to investable benchmarks within the ETF space. The ability to develop our own line of proprietary benchmarks will allow for more flexibility to create indices that are well suited to underlie investment products such as ETFs."

MVIS is headed by CEO Lars Hamich, who has more than  15 years of experience in the index field and financial product strategies.

3) Forward Management Introduces No-Load Investor Share Class for Select Income Fund

Forward Management, LLC announced on Tuesday the introduction of a new investor share class for the $1.2 billion, Forward Select Income Fund (FFSLX). The Select Income strategy focuses on preferred securities of real estate investment trusts (REITs) and provides attractive yields. The new investor share class carries no sales load, and also offers a lower investment minimum than the fund’s existing no-load institutional share class, enabling individuals to start investing with as little as $500.

Forward’s real estate investment team, including Select Income’s lead portfolio manager Joel Beam, also recently released an overview titled “REIT Preferred Stocks: an Income Solution Often Overlooked.”

4) SEI Launches Tax Management Structure For Large Cap Mutual Fund

SEI (SEIC) announced Tuesday a new approach to its Tax-Managed Large Cap Fund, intended to improve the fund’s tax management. SEI will continue to serve as a manager-of-managers and oversee the subadvisors responsible for recommending the purchase and sale of securities of the fund.

However, under the new structure, the subadvisors will submit a model portfolio to an overlay manager. The overlay manager will be responsible for aggregating the model portfolios with limited authority, with a goal of decreasing the fund’s overall tax exposure and providing greater after-tax returns for investors.

Although SEI has used an overlay manager for its separately managed accounts since 2000, this represents the first time an investment company has implemented this type of tax management structure in a multimanager mutual fund. SEI will use Parametric Portfolio Associates as the fund’s overlay manager.

SEI’s new approach enables tax-sensitive investing throughout the year. Traditionally, the fund allocated only a portion of its assets to a subadvisor for more extensive tax management.

The new “overlay” structure allows the overlay manager to supervise the impact of the taxes for the entire fund by implementing the model portfolios submitted by other subadvisors. The overlay manager seeks to manage the impact of taxes by, among other things, selling stocks with the highest tax cost first, opportunistically harvesting losses, and deferring recognition of taxable gains, where possible.

5) Curian Capital Introduces New Asset Class Enhancements

Curian Capital, LLC announced on November 28 several asset class enhancements that offer a higher degree of active management capability within Curian’s custom-style portfolios. The additions can help advisors capture additional return potential and provide enhanced diversification on behalf of their clients through actively managed alternative, international equity, real estate and municipal bond asset classes.

Curian has also launched the Curian Series Trust funds, which give financial professionals access to the expertise of investment management firms including PIMCO and Wellington Management Company, LLP. The trust structure also provides Curian with enhanced information and control over fund flows, complete transparency regarding portfolio holdings and access to key subadvisor investment personnel.

The new funds will include the Curian/PIMCO Total Return Fund and Curian/PIMCO Income Fund, both actively managed by PIMCO, and the Curian/WMC International Equity Fund, which will be actively managed by Wellington Management.

Read last week’s Portfolio Products Roundup at AdvisorOne.com.

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