July 13, 2012

Top Portfolio Products: AQR Capital Launches Defensive Funds

Schwab offers fixed-income fund; more

Portfolio Products logoNew products introduced over the last week include four new defensive mutual funds from AQR Capital and a new fixed-income fund from Schwab.

In addition, AdvisorShares and Roger Nusbaum teamed up on a new actively managed ETF and ALPS launched a “Dogs of the Dow” ETF.

Here are the latest developments of interest to advisors:

1) AQR Capital Management Launches Defensive Mutual Funds

AQR Capital Management announced Monday the launch of four new mutual funds: AQR U.S. Defensive Equity Fund (AUEIX), AQR International Defensive Equity Fund (ANDIX), AQR Emerging Defensive Equity Fund (AZEIX) and AQR Risk-Balanced Commodities Strategy Fund (ARCIX). They will be distributed through financial advisors only.

The funds seek to provide equity-like returns with lower volatility and smaller drawdowns. ARCIX seeks to achieve higher returns than its benchmark (DJ-UBS Index) while maintaining a more consistent risk level and smaller drawdowns using an actively managed, risk-balanced approach.

2) Schwab Launches New Laudus Mondrian Global Fixed-Income Fund

Charles Schwab Investment Management announced Tuesday the launch of the value-oriented Laudus Mondrian Global Fixed Income Fund (LMGDX). It is managed by Charles Schwab Investment Management and subadvised by institutional investment manager Mondrian Investment Partners.

LMGDX seeks long-term total returns by investing in fixed-income securities around the world and is generally comprised of high-quality bonds issued by the governments or government agencies of developed and emerging-market countries. It has a gross operating expense ratio (OER) of 1.03%, with a net OER of 0.85%, which is waived through January 10, 2013. LMGDX is available for a $100 minimum investment.

3) AdvisorShares, Roger Nusbaum Bring Actively Managed ETF to Market

AdvisorShares announced that the Global Alpha & Beta ETF (RRGR) opened for trading on Wednesday. RRGR is subadvised by Your Source Financial, a Phoenix, Ariz.-based investment advisor. Roger Nusbaum, chief investment officer of Your Source Financial, will serve as portfolio manager.

RRGR employs a broadly diversified global asset allocation strategy seeking to outperform diversified financial indices such as a 60/40 allocation to the S&P 500 Index and the Barclays Capital Aggregate Bond Index, while providing lower volatility and reduced risk. It utilizes a top-down investment perspective that focuses on proprietary security and asset class selection by primarily selecting individual stocks, ETFs and American Depositary Receipts (ADRs) that provide investment exposure to global markets, and will also tactically add defensive investments.

4) DST Systems’ ALPS Launches Sector Dividend Dogs ETF

ALPS, a DST company, announced recently the launch of the ALPS Sector Dividend Dogs ETF (SDOG), which applies the “Dogs of the Dow” theory, an investment strategy annually selecting the 10 DJIA stocks whose dividend is the highest fraction of their price, on a sector-by-sector basis using the S&P 500 as its starting universe of eligible securities.

SDOG provides the following potential benefits: a high dividend yield relative to U.S. large-cap dividend indices; sector and stock diversification; and alpha potential.

Read the July 7 Portfolio Products Roundup at AdvisorOne.

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