New products introduced over the last week include an expansion of the FTSE Renaissance IPO Indexes; an Australia-based equity trust introduced by Neuberger Berman; Van Eck filed exchange offer documents on six HOLDRS; and Vanguard switched four funds to all-index and added admiral shares to six others.
In addition, First Trust prepared its Energy Infrastructure Fund for an IPO; Grandeur Peak Advisors will premier two new funds; and Castle Investment Management announced a cut in the expense ratio for its Castle Focus Fund.
Here are the latest developments of interest to advisors:
1) FTSE Renaissance IPO Indexes Expanded to Capture Performance of New Equity Issues Worldwide
Global index provider FTSE Group and IPO research and investment firm Renaissance Capital on Sept. 27 announced the expansion of the FTSE Renaissance IPO Index Series. The series is being renamed the FTSE Renaissance Global IPO Index Series to reflect its new global nature, now providing investors the ability to capture the performance of IPOs listed in 53 new country and regional indices within developed and emerging EMEA, Asian, and American markets.
The series tracks early IPO returns, often missed by most major global IPO benchmarks; many IPOs wait three months or longer for inclusion. The series indices, suitable for creation of ETFs and other structured products, include qualified IPOs at the end of their first trading day. The IPOs are then removed after approximately two years.
2) Neuberger Berman Launches Emerging Markets Equity Trust in Australia
Neuberger Berman announced Sept. 28 that it has launched its first Australian-domiciled unit trust, the Neuberger Berman Emerging Markets Equity Trust, aimed at institutional investors. Australian institutions Intrust Super and Energy Super are its initial investors, with a total of approximately A$100 million in assets. The trust was launched by Melbourne-based Neuberger Berman Australia because of the firm’s emerging markets capability and Australian investors’ interest in such opportunities.
Conrad Saldanha, managing director and New York-based head of emerging markets equities for Neuberger Berman, is the trust’s portfolio manager. Saldanha and his colleagues currently manage approximately U.S.$1.5 billion in emerging markets equity assets for institutional and individual investors worldwide. The team employs a bottom-up, research-driven all-cap securities selection approach, seeking undervalued companies that display characteristics such as industry leadership, management track record and cash flow growth potential.
3) Van Eck Global Files Exchange Offer Documents for 6 Merrill Lynch HOLDRs
Van Eck Global announced Friday that it has filed with the SEC to commence exchange offers for six Merrill Lynch-sponsored HOLDRS: oil services (OIH), semiconductor (SMH), pharmaceutical (PPH), biotech (BBH), retail (RTH) and regional bank (RKH). Van Eck will then offer investors of these six HOLDRS the opportunity to exchange their receipts in these HOLDRS trusts for shares of new market vectors ETFs.
The new ETFs are expected to trade under the corresponding HOLDRS’ ticker symbols. The firm expects the offers to be launched in Q4 of 2011 and consummated later that quarter. They will require proactive action on the part of individual HOLDRS investors. By participating, HOLDRS investors will authorize conversion of stocks in the HOLDRS trusts into a diversified basket of stocks that align with the indices underlying the new market vectors ETFs. The transaction is structured to be an equal-value exchange.
4) Vanguard Lifestrategy Funds Adopt All-Index Approach; 6 Index Funds Add Admiral Shares
The four funds in the Vanguard LifeStrategy series, which currently feature a mix of passively and actively managed funds, will adopt an all-index approach, it was announced Friday. The funds will invest solely in their three broad market component funds (Vanguard Total Stock Market Index Fund, Vanguard Total International Stock Index Fund, and Vanguard Total Bond Market II Index Fund) and gradually eliminate exposure to their actively managed component funds (Vanguard Asset Allocation Fund and Vanguard Short-Term Investment-Grade Fund). Once the transition to the lower-cost index funds is completed, the funds’ expense ratios are expected to decline two to four basis points.