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Portfolio > Portfolio Construction

Top 12 Portfolio Products: PIMCO, Fiserv, Invesco PowerShares, KMS-Erado

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The following are some key portfolio product and investment strategy announcements from the prior week of interest to advisors.

1) PIMCO Launches Floating Rate Fund

PIMCO, led by CEO Mohammed El-Erian (left), announced the launch May 4 of the PIMCO Senior Floating Rate Fund (PSRIX), giving investors access to the yields and portfolio diversification offered in the $600 billion senior secured floating rate market.

The fund combines PIMCO’s investment process and global reach with the experience of Portfolio Manager Elizabeth MacLean, formerly of Lord Abbett. PIMCO has managed bank loans, or senior secured floating rate loans typically tied to Libor, since 1996.

2) Fiserv Announces UMH Technology Strategy and Milestones

Fiserv, Inc. announced May 4 its strategy and milestones for the introduction of what it called the industry’s first true unified managed household (UMH) capability.

The  first milestone was the June 2010 acquisition of AdviceAmerica, which extended Fiserv's capabilities into front-office applications, such as financial planning, retirement income planning, CRM, proposal-generation and plan-monitoring tools. AdviceAmerica’s solutions are now marketed as Financial Advice Solutions from Fiserv.

The second milestone will move additional managed account programs—mutual fund advisory (MFA) and ETFs—onto the Unified Managed Account (UMA) platform, allowing more functionality in the UMA such as rebalancing across multiple asset classes and systematic contributions and withdrawals.

Later this year Fiserv said it will merge its front-office tools with its middle- and back-office technology, integrating Financial Advice Solutions, Portfolio Management and Trading Solutions and Performance Reporting Solutions onto the company’s Unified Wealth Management platform, where advisors will be able to plan, trade and report on a single system.

3) Invesco PowerShares: Low Volatility/High Beta S&P 500-Based ETFs

Invesco PowerShares announced May 5 that it would list two new ETFs, PowerShares S&P 500 Low Volatility Portfolio (SPLV) and PowerShares S&P 500 High Beta Portfolio (SPHB).

The former, what Invesco calls the first volatility-weighted ETF, seeks investment results that correspond generally to the price and yield of the S&P 500 Low Volatility Index. It will will invest at least 90% of its total assets in common stocks that comprise the underlying index, which consists of the 100 stocks from the S&P 500 Index with the lowest realized volatility over the past 12 months, as determined by Standard & Poor's. Index constituents are rebalanced quarterly.

The latter is the first beta-weighted ETF, and seeks investment results that correspond generally to the price and yield of the S&P 500 High Beta Index. It will invest at least 90% of its assets in common stocks that comprise the underlying index, which consists of the 100 stocks from the S&P 500 Index with the highest sensitivity to market movements, or beta, over the past 12 months, as determined by Standard & Poor's.

4) KMS Financial, Erado Extend Deal on Social Media Compliance

KMS Financial Services, Inc.and electronic communications archiver Erado agreed May 5


on a multiyear extension of existing cloud-based e-mail archiving, and have added social media capturing and compliance servicing in the wake of a period of beta testing over the past year.

5) Goldman Launches Brazil, China Mutual Funds

Goldman Sachs Asset Management, L.P. (GSAM)announced May 3 that it had launched the Goldman Sachs Brazil Equity Fund (GZIAX) and the Goldman Sachs China Equity Fund (GNIAX) on April 29. The portfolios seek to achieve long-term capital appreciation by investing primarily in local Brazilian and Chinese equities.

The funds will be managed by local Goldman Sachs Asset Management International equity teams in Brazil and China, and are offered in A and C shares, both with $1,000 minimum initial investments. Both funds also offer institutional shares.

6) X Launches Food, Fishing ETFs

Global X Fundsannounced that it launched last week the Global X Food ETF (EATX)  and the Fishing Industry ETF (FISN).

The Global X Food ETF targets global companies involved in the food industry, which stand to benefit as the population in emerging economies continues to increase their purchasing power. Multinationals like Nestle, one of the world’s largest food producers with a 4.88% weighting in the ETF as of April 29, has 40% of its business in emerging markets and saw underlying sales up 12% in regions such as China, South Asia and Africa.

The Fishing Industry ETF tracks the Solactive Global Fishing Index. Global X said it is the first ETF globally targeting the fishing industry. The fishing industry comprises two main components: commercial fishing and aquaculture.

The Global X Fishing Industry ETF is designed to measure broad based equity market performance of global companies involved in the fishing industry.

7) IndexIQ Launches Global Oil Small-Cap ETF

IndexIQ, a developer of index-based liquid alternative investment solutions, announced May 5 the IQ Global Oil Small Cap ETF (IOIL).

IOIL is a global small-cap ETF designed to provide pure-play exposure to companies that are primarily engaged in the oil industry. This includes firms involved in exploration and production (E&P); refining and marketing; and equipment, services and drilling. It seeks to track, before fees and expenses, the performance of the IQ Global Oil Small Cap Index.

8) Aberdeen Introduces Local Currency Fund

Aberdeen Asset Management Inc. announced May 4 that it launched the Aberdeen Emerging Markets Debt Local Currency Fund (ADLAX) in response to what it said was rising interest in the asset class.

The fund, managed by Aberdeen’s Emerging Market Debt Team, led by Brett Diment, seeks to provide long-term total returns by investing at least two thirds of the portfolio assets in fixed income securities denominated in the local currencies of emerging markets.

9) Lord Abbett Targets Inflation in New Fund

Lord Abbett introduced a new mutual fund designed to offer protection during inflation and rising rates, according to the company. The Lord Abbett Inflation Focused Fund, designed


for investors concerned about the impact of inflation on future purchasing power, was announced on Tuesday.

The fund seeks to deliver positive total return in an inflationary environment. Its investment strategy utilizes a combination of short-term credit instruments and inflation-linked investments in an effort to enhance the total return potential of the portfolio during periods of inflation and rising interest rates.

10) Hatteras Funds Announces Single Strategy Hedged Mutual Funds

Hatteras Funds announced May 3 two single strategy hedged mutual funds to its lineup of alternative mutual fund products. The Hatteras Long/Short Equity Fund (HLSAX/HLSIX) and the Hatteras Long/Short Debt Fund (HFIAX/HFINX) provide access to two of the four core strategies available through the Hatteras Alpha Hedged Strategies Fund (ALPHX), which was launched in 2002.

The Long/Short Equity Fund seeks to achieve consistent returns with moderate correlation to traditional U.S. equity market indices and lower volatility of monthly returns over a market cycle. The fund employs long and short trading in common stock, and preferred stock of U.S. and foreign issues to achieve capital appreciation.

The Long/Short Debt Fund seeks to achieve total return through current income, capital preservation and capital appreciation. The fund strives to provide low correlation to traditional fixed income benchmarks, employing long and short trading in strategies that utilize debt and debt-related securities that allow the fund to focus on opportunities to take advantage of perceived discrepancies in the market prices of certain convertible bond, common stock, fixed income and derivative securities.

11) Cetera Announces New Advisory Platform Launch

Cetera Financial Group, led by CEO Valerie Brown (left), announced May 3 the launch of a new advisory technology platform to its BD representatives at Financial Network and Multi-Financial. Designed by FolioDynamix, the platform integrates within Cetera’s SmartWorks advisor workstation to give advisors more control in managing their fee-based business while increasing the efficiency and flexibility of their practice.

12) Allianz Life Expands Distribution, Support for Allianz Retirement Pro VA

Allianz Life Insurance Company of North America announced May 2 that it has formed strategic relationships with seven broker/dealers to add the Allianz Retirement Pro VA to their fee-based advisory platforms.

Previously available only through LPL Financial, Retirement Pro will now be offered through Cambridge Investments, Advisor Group (representing Royal Alliance, SagePoint and FSC Securities), Commonwealth Financial Network and Valmark Securities.

Read last week’s Portfolio Products Roundupat


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