New products introduced over the last week include two new bond funds from Fidelity and an alternative -income fund from Palmer Square.
In addition, Thornburg Investments introduced an R6 share class and Securian offered a new optional guaranteed living withdrawal benefit rider on some variable annuities.
Here are the latest developments of interest to advisors:
1) Fidelity Launches Global and International Bond Funds
Fidelity Investments announced on Wednesday the launch of Fidelity Global Bond Fund (FGBFX) and Fidelity International Bond Fund (FINUX), available directly to investors as well as through financial advisors. Both funds, which invest in sovereign government debt and corporate and securitized credit securities, will be measured against a GDP-weighted index.
FGBFX invests in both U.S. dollar-denominated and non-U.S. dollar-denominated securities issued throughout the world, including emerging markets, normally primarily in investment-grade debt securities. It will actively manage currency exposures, and may invest up to 20% of its assets in lower-quality debt securities.
The global-bond fund will be managed against the Barclays Global Aggregate GDP Weighted Index; aggregate indices include corporate bonds, bank capital and securitized bonds, in addition to government bonds.
FINUX, the international-bond fund, invests primarily in non-U.S. dollar-denominated securities, including emerging markets, and will normally invest primarily in investment-grade debt securities. It will actively manage currency exposures and may invest up to 20% of its assets in lower quality debt securities. FINUX will be managed against the Barclays Global Aggregate ex-USD GDP Weighted Index.
Jamie Stuttard, Fidelity’s head of international bond portfolio management, will serve as the lead portfolio manager for both. Curt Hollingsworth and Jeff Moore will co-manage FGBFX, while Hollingsworth will also co-manage FINUX. In addition, Matt Conti will manage the high-yield assets of each fund.
Fidelity also published a new paper focused on global bond investing, “Transformations in Country Dynamics and the Implications for Global Bond Markets,” which analyzes the significant structural changes in the global bond landscape.
Palmer Square Capital Management LLC announced on Tuesday the introduction of the Palmer Square SSI Alternative Income Fund, offering investor (PSCAX) and institutional (PSCIX) share classes. In partnership with Montage Investments, Palmer Square and SSI have raised approximately $160 million of investment capital to launch the fund. It is sub-advised by SSI Investment Management.
It seeks absolute returns and a steady income stream by investing long in convertible securities and by establishing short positions in the common stock of the issuers of those convertible securities.
3) Thornburg Investment Introduces R6 Share Class
Thornburg Investment Management, Inc. recently announced the introduction of its first-ever R6 share class, available through its International Value Fund. The shares will be offered through defined contribution pension plans, only charge an investment advisory fee and other fund expenses, and are free of 12(b)-1 or other shareholder servicing fees. It anticipates offering R6 share classes for other Thornburg funds in the future.
Also, in keeping with new pension regulations from The Department of Labor set to go into effect in July, the R6 shares will enable plan sponsors to separate mutual fund expenses from their recordkeeping and other service provider fees when determining if fees paid for plan services are reasonable.
4) Securian Unveils New GLWB with MultiOption Variable Annuities
Securian announced on Wednesday the introduction of its Ovation Lifetime Income II guaranteed living withdrawal benefit (GLWB) rider, an optional rider available with certain Securian MultiOption variable annuities for an additional cost (1.20% on the greater of contract value or benefit base value). The rider provides a benefit designed to guarantee annual withdrawals from the annuity contract, up to an annual limit, beginning the later of the contract anniversary following the purchaser’s 59th birthday or the date the rider is elected.
Some of the rider features include 6% compound benefit base enhancement and a benefit base guarantee that doubles the benefit base after 10 years or the client’s 70th birthday, if no withdrawals have been taken. There is also a CustomChoice allocation that allows advisors to assist clients in selecting their own investments, up to a 70% equity/30% fixed income portfolio. Election of the rider does require use of an approved allocation strategy. Increased withdrawal flexibility allows clients to take withdrawals if needed without canceling the 6% benefit base enhancement feature.
Read the May 25 Portfolio Products Roundup at AdvisorOne.com