February 14, 2014

Top Portfolio Products: AdvisorShares Launches 4 Gold/Currency ETFs

Fixed indexed annuity from Nationwide Financial, Annexus; more

New products and changes introduced over the last week include four gold/currency ETFs from AdvisorShares and a fixed indexed annuity from the partnership of Nationwide Financial and Annexus.

In addition, Citi and Research Affiliates have launched a global corporate bond index.

Here are the latest developments of interest to advisors:

1) AdvisorShares Launches Gold/Currency ETFs

AdvisorShares has announced the launch of four gold/currency exchange-traded funds: AdvisorShares Gartman Gold/Euro ETF (GEUR), AdvisorShares Gartman Gold/British Pound ETF (GGBP), AdvisorShares Gartman Gold/Yen ETF (GYEN) and AdvisorShares International Gold ETF (GLDE). Each provides gold exposure in different currency terms through a '40 Act structure. The ETFs are subadvised by Treesdale Partners.

The ETFs seek to provide positive returns by utilizing their respective currencies to invest in the gold market. While GEUR, GGBP and GYEN invest in gold via the euro, pound and yen, GLDE invests in exchange-traded products (ETPs) that provide diversified exposure to the international gold market. The four gold ETFs are not expected be subject to unrelated business taxable income (UBTI) and schedule K-1s, which are typically present in commodity-linked investments.

2) Nationwide Financial, Annexus Partner for Fixed Indexed Annuity

Nationwide Financial and Annexus have announced a new partnership and the launch of Nationwide New Heights, a fixed indexed annuity product. New Heights, along with its two optional riders, is built for risk-averse clients who want the stability that a fixed product provides while also having upside growth potential and a return of principal.

Advisors can choose between the riders, available at additional cost; each is available with a purchase payment bonus option. The Nationwide High Point 365 Lifetime Income Benefit rider helps clients meet their retirement income needs, and the Nationwide High Point Enhanced Death Benefit rider provides legacy planning options. Both offer clients the greater of potential growth of their contract value or a fixed-rate increase on their premium.

3) Citi and Research Affiliates Launch Global Corporate Bond Index

Citi and Research Affiliates LLC announced that they have launched the Citi RAFI World Corporate Investment-Grade Bond Index. The index is based on the RAFI Fundamental Index concept developed by Research Affiliates.

The index uses two factors in weighting bonds in the portfolio: long-term assets, which represent the portion of assets that long-term bondholders have a claim on, and cash flow, which reflects debt service capacity. Weighting by long-term assets systematically underweights companies with high leverage and overweights low-leverage companies, while weighting by cash flow systematically underweights companies with low debt coverage and overweights those with high debt coverage. In addition, financial ratios are used to reduce exposure to companies that are more susceptible to downgrades.

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Read the Feb. 9 Portfolio Products Roundup at ThinkAdvisor.

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