New products introduced over the last week include three alternative investment funds from BlackRock, a new dynamic allocation fund from Putnam, and two Credit Suisse funds reorganized into Aberdeen funds, as well as an expansion in Russell ETFs and new European indexes from Chi-Ex Europe and Russell.
In addition, Neuberger Berman opened an office in Buenos Aires; ProShares added two VIX ETFs; Brown Advisory launched a new fund; and Touchstone announced it would acquire some of Old Mutual’s fund assets.
Here are the latest developments of interest to advisors:
1) BlackRock Launches Three Mutual Funds Featuring Alternative Investment Strategies
BlackRock Inc. announced Thursday the launch of three mutual funds featuring alternative investment strategies. The funds are designed to provide individual investors with access to strategies that offer non-correlated returns and diversification benefits with the goal of minimizing portfolio volatility and preserving return objectives. The new funds will be available to retail and HNW investors through financial intermediaries.
The Commodity Strategies Fund (BCSAX) is designed to provide complete commodities exposure through commodities futures equities with exposure to natural resources. It will be managed by a team led by Evy Hambro and Robin Batchelor, joint chief investment officers of the natural resources equity team and members of the global index commodities team.
The Emerging Markets Long/Short Equity Fund (BLSAX) uses advanced techniques to identify misvaluations across stocks and markets in a risk-controlled manner. Jeff Shen, Ph.D., head of Asia Pacific and emerging market equity within the scientific active equity group, will be lead portfolio manager.
The Global Long/Short Credit Fund (BGCAX) is an interest-rate-neutral, global long/short credit fund seeking to generate total returns from credit markets. Michael Phelps, head of European credit, and Joshua Tarnow, member of the corporate credit group within the fundamental fixed income team, will co-manage.
2) New Putnam Dynamic Risk Allocation Fund Seeks Total Return in Varying Market Conditions
Putnam Investments announced Tuesday that it has launched the Putnam Dynamic Risk Allocation Fund (Class A: PDREX), designed to actively balance sources of portfolio risk across multiple asset classes, with flexibility to respond dynamically to changing economic conditions and market valuations, in pursuit of consistent levels of total return. The fund will use a risk parity approach utilized for institutional clients, and is managed by the global asset allocation team, led by Jeffrey L. Knight, head of global asset allocation.
It diversifies across global markets, reducing reliance on equities, to pursue a more consistent total return, and has a “risk lens” at the asset allocation level; it attempts to create more consistent performance by boosting exposure to less volatile and/or less correlated asset classes and diversifying risk exposure.
3) Two Credit Suisse Funds Reorganized Into New Aberdeen U.S. Equity Funds
Aberdeen Asset Management Inc. (“Aberdeen”), adviser for Aberdeen Funds, announced Thursday that shareholders of two Credit Suisse funds, currently managed by Credit Suisse Asset Management, approved a reorganization into new Aberdeen Funds at a special meeting on October 3. The reorganizations are expected to close on October 10.
The Credit Suisse Large Cap Blend Fund will be reorganized into the Aberdeen U.S. Equity I Fund; its name will change to Aberdeen U.S. Equity Fund. The Credit Suisse Large Cap Blend II Fund will be reorganized into the Aberdeen U.S. Equity II Fund.
4) Russell Expands “Investment Discipline” ETFs With 4 New Small-Cap Funds
Russell Investments launched four small-cap investment discipline ETFs on NASDAQ Wednesday. They are based on corresponding and newly launched Russell U.S. small-cap investment discipline indexes.
5) Chi-X Europe & Russell Indexes Unveil New European Indexes
Chi-X Europe and Russell Indexes announced on October 3 the Chi-X Europe Russell Index (CHERI) series of pan-European indexes, subsets of the Russell Global 1000 Index, designed to provide users with tradable pan-European and euro zone indexes.
The Chi-X Europe Russell PanEurope Index (CHERI PanEurope) is a broad, highly liquid index of large-cap stocks from developed European markets. The Chi-X Europe Russell Eurozone Index (CHERI Eurozone) is a liquid, large-cap index providing broad exposure to Eurozone markets. The Chi-X Europe Russell PanEurope 60 Index (CHERI60) is a subset of CHERI PanEurope. The Chi-X Russell Europe Eurozone 40 Index (CHERI40) is a subset of CHERI Eurozone.
6) Neuberger Berman Opens Office in Buenos Aires
Neuberger Berman announced October 3 that through its new Buenos Aires office, opened in August, it is now serving clients in Latin America. The office is the first in Latin America for New York-based Neuberger Berman. Maxi Rohm, vice president, leads the firm’s business development efforts in Latin America.
Since launching its Latin America efforts in Q1 of 2010, Neuberger Berman has attracted over $700 million from approximately 15 institutional clients investing in the firm’s equities, fixed income, and alternatives strategies. High yield and private equity are two investment strategies that have attracted significant assets from clients, said Rohm, who anticipates those two strategies, along with global equities, specifically emerging markets stocks, to be in demand from Latin American institutional investors.
7) ProShares Launches First Geared VIX Futures ETFs
ProShares announced Tuesday the launch of the first ETFs in the U.S. designed to provide magnified or inverse exposure to VIX futures.
The ProShares Ultra VIX Short-Term Futures ETF (UVXY) seeks to provide 2x the daily performance of the S&P 500 VIX Short-Term Futures Index, before fees and expenses. The ProShares Short VIX Short-Term Futures ETF (SVXY) seeks to provide -1x the daily performance of the S&P 500 VIX Short-Term Futures Index, before fees and expenses.
8) Brown Advisory Launches Long/Short Fund Focused on Total Return via Fixed Income
Brown Advisory announced Wednesday the addition of the new Brown Advisory Tactical Bond Fund, which officially launched September 30. It is available through Brown Advisory and other financial advisors. Thomas D.D. Graff, CFA, a portfolio manager on the fixed income team, is responsible for managing the fund.
Focused on total return, the fund will seek to make investments in fixed income instruments including tax-exempt municipal bonds, corporate bonds, U.S. Treasury bonds, Treasury Inflation Protected Securities and cash equivalents, and may also use derivative securities either on a long or short basis. The fund uses a quantitative modeling process to make purchase and sale decisions.
9) Touchstone Assets to Grow to $10 Billion With Acquisition of Old Mutual Fund Assets
Touchstone Investments and Old Mutual Asset Management (OMAM) announced Tuesday that Touchstone Advisors, Inc. (Touchstone), a wholly owned subsidiary of Western & Southern Financial Group, has entered into a definitive agreement with OMAM, the U.S.-based global asset management business of Old Mutual plc, and its subsidiary Old Mutual Capital, Inc. (OMCAP) for Touchstone to acquire selected assets of OMAM’s U.S. mutual fund business. The acquisition will increase Touchstone’s assets under management to nearly $10 billion and add several new subadvisors to its current roster of fund managers. Terms were not disclosed.
Consummation of the transaction is expected to be completed early in the second quarter of 2012. Upon the completion of the transaction, 17 Old Mutual funds will be reorganized into Touchstone funds with OMAM’s affiliated investment managers continuing as subadvisors to a significant majority of those funds.
Read last week’s Portfolio Products Roundup at AdvisorOne.com.