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Portfolio > Mutual Funds

Top Portfolio Products: Schwab Adds Dividend ETF, Ashmore EM Mutual Fund

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New products introduced over the last week include a new exchange traded fund (ETF) from Schwab, which also modified two funds. Also, Ashmore launched a new emerging markets fund, and Russell expanded two of its indexes to global markets.

In addition,Vanguard added a guaranteed lifetime withdrawal rider to its low-cost variable annuity, and USAA launched a unified managed account (UMA) product geared toward those building and managing wealth.

Here are the latest developments of interest to advisors:

1) Schwab Launches New U.S. Dividend Equity ETF

Charles Schwab announced Thursday that the Schwab U.S. Dividend Equity ETF (SCHD) has begun trading. The ETF takes a blended income/capital appreciation approach that seeks to track financially strong companies, relative to their peers, with a history of paying dividends.

The ETF seeks investment results that track the total return of the Dow Jones U.S. Dividend 100 Index as closely as possible before fees and expenses, and carries a 0.17% operating expense ratio.

Schwab is also refining two of its low-cost indexed mutual funds by aligning them with more recognizable benchmarks. Starting on Dec. 14, the Schwab Small-Cap Index Fund (SWSSX) will follow the Russell 2000 Index; also, effective Nov. 1, its operating expense ratio will drop to 17 basis points. On Dec. 20, the Schwab International Index Fund (SWISX) will track the MSCI EAFE Index as its benchmark.

2) Ashmore Launches Emerging Markets Small-Cap Equity Fund

Ashmore Investment Management Limited announced on Oct. 11 the launch of the Emerging Markets Small-Cap Equity Fund, investing in small-cap companies in emerging market countries globally. The firm also announced broader access to its U.S. mutual funds through the introduction of A and C retail share classes.

Ashmore also recently appointed Ted Smith as head of U.S. intermediary distribution, reporting directly to Christoph Hofmann, global head of distribution.

Smith, based in New York, is responsible for establishing relationships with financial intermediaries and for building a team to serve financial advisors. He brings over a decade of experience in partnering with U.S. intermediaries and has experienced emerging markets firsthand, having lived and worked in Russia for four years.

3) Russell Investments Expands Defensive and Dynamic Indexes to Global Markets

Russell Investments announced on Oct. 17 that its defensive and dynamic indexes, introduced in February, will expand coverage beyond the U.S. stock universe to the 10,000 stocks tracked by Russell Indexes globally.

The Russell Global Defensive and Dynamic Indexes split the broad equity market in half based on a combination of stability factors; the more stable half is called “defensive” and the less stable is called “dynamic.” In addition, the new indexes follow the same global-relative composition as the Russell Global Indexes, with stocks ranked by sector and style across regions rather than country, to better reflect how investors now approach global markets.

4) Vanguard Adds Guaranteed Lifetime Withdrawal Benefit Feature to VA

Vanguard announced Thursday the addition of an optional guaranteed lifetime withdrawal benefit (GLWB) rider, issued by Monumental Life Insurance Company, to its low-cost variable annuity (VA).

The benefit guarantees that a fixed percentage of the total withdrawal base can be withdrawn annually for the annuitant’s lifetime (and that of his or her spouse, if desired) to provide a steady income stream. These withdrawals continue for life, regardless of market performance and even if the account value is exhausted.

Unlike traditional annuitization, clients electing the GLWB retain access to principal and can stop taking withdrawals at any time without incurring a penalty. Upon death, any remaining accumulated value will go to a beneficiary.

The rider will be available on three portfolios within the VA:  an existing balanced portfolio, actively managed by Wellington Management Company, LLP; a new moderate allocation portfolio; and a new conservative allocation portfolio.

5) USAA Launches UMA Product Geared to Individuals Building Wealth

USAA launched on Friday a unified managed account (UMA) product called USAA Managed Portfolios, offering investors what the company says is one of the lowest minimum investment requirements for a UMA program and geared to those building wealth as well as those managing significant wealth.

For a minimum investment of $25,000, investors can access the program, including the ability to house investments in one account, have one tax statement for all investments in the account and access advice from a dedicated team of USAA investment professionals.

The portfolio also is designed to be a “lifetime account,” meaning investors don’t have to open new accounts or sign new contracts as their investment profile changes. The portfolio can evolve as an investor’s needs change.

Read last week’s Portfolio Products Roundup at


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