Last week, a number of funds came to market, including a new iShare fund, two ETNs from UBS, a Neuberger Berman global fund, a Catholic advocacy fund from Aperio, a currency fund from quantitative fund manager Aequam Capital, and a merged Highland Funds product.
In other fund news, Morningstar has announced plans to introduce forward-looking, analyst-driven global fund ratings and a uniform approach for global fund research reports.
1) iShares Announces Launch of Floating Rate Note Fund
BlackRock Inc.on Friday announced that its iShares Exchange Traded Funds business, the world's largest manager of ETFs, has launched its first floating rate note fund: iShares Floating Rate Note Fund (FLOT). The fund is designed for investors to use in a rising rate environment.
“The value of floating rate bonds fluctuates much less in response to market interest rate movements than the value of fixed-rate bonds,” said Russ Koesterich, iShares chief investment strategist, in a statement.
“They can be a key instrument to help fixed-income investors insulate their portfolio in a rising inflation environment. While we don’t see this as a near-term threat, we still believe that interest rates are likely to rise, arguably substantially, in 2012 and beyond,” he added
FLOT is benchmarked to the Barclays Capital US Floating Rate Note <5 Years Index. The market cap-weighted index measures the performance of U.S. dollar-denominated, investment-grade, floating rate notes with less than 5 years to maturity. The bonds that are included in the index must have an original maturity of between 18 months and 5 years and remain in the index until one month prior to maturity.
2) UBS Announces Two New ETNs Designed for Contango in Oil and Natural Gas Markets
UBS Investment Bankannounced the launch of two new Exchange Traded Notes (ETNs)designed to take advantage of potential contango in the oil and natural gas markets. The ETRACS Natural Gas Futures Contango ETN (GASZ) and the ETRACS Oil Futures Contango ETN (OILZ) began trading on Thursday. These ETNs are designed to capitalize on contango in oil and natural gas futures markets, while minimizing the exposure to absolute changes in the underlying prices of these commodities.
GASZ is linked to the performance of the ISE Natural Gas Futures Spread Index, which, through a series of investments in natural gas sub-indices, effectively provides short exposure in front month natural gas futures contracts and long exposure in far-term natural gas futures contracts.
OILZ is linked to the performance of the ISE Oil Futures Spread Index, which, through a series of investments in oil sub-indices, effectively provides a 1x short exposure in front month oil futures contracts and a 1.5x long exposure in midterm oil futures contracts.
3) Neuberger Berman Introduces Global-Allocation Fund
Neuberger Berman Group LLCannounced on June 13 the launch of the Neuberger Berman Global Allocation Fund (NGLAX, NGLCX, NGLIX). It is the firm’s first global portfolio with broad investment latitude and an emphasis on risk management to be offered to mutual fund investors, and blends fundamental and quantitative investment analysis to determine asset allocation and security selection.
The fund, with current assets under management of $1.9 billion, is managed by a team consisting of Wai Lee, chief investment officer of Neuberger Berman’s quantitative investment group, as well as three other portfolio managers from the group: Bobby Pornrojnangkool, Ph.D., Alex Da Silva, and Ping Zhou, Ph.D. The team also includes Joseph Amato, the firm’s president and chief investment officer, and Brad Tank, chief investment officer for fixed income, and may also leverage the expertise of more than 130 of the firm’s dedicated equity and fixed income research analysts.
The fund seeks to provide exposure to global equity, fixed income and currency markets through a variety of investment instruments, including long and short positions in individual securities, index instruments, and ETFs as well as derivatives.
It employs a proprietary top-down asset allocation model to establish a “tactical tilt”—making allocation decisions among the various investment regions and asset classes. It also employs a proprietary bottom-up security selection model to add value by choosing global securities its managers believe are most likely to perform well relative to other investment options.
4) Aperio Group Expands Faith-Based Strategy Offerings with Catholic Advocacy Portfolio
Aperio Group LLC announced June 1 that it has expanded its faith-based Socially Responsive Indexing (SRI) offerings by introducing the Aperio Catholic Advocacy Portfolio. The portfolio, designed for HNW and institutional investors, seeks to match the performance of the broad equity market while meeting and exceeding the U.S. Catholic Council of Bishops (USCCB) guidelines through a combination of security screening and active corporate participation.