New products introduced over the last week include a new corporate-bond ETF from iShares; a new MLP ETF from Global X; Touchstone’s completion of the acquisition of Old Mutual funds; investment by Affiliated Managers Group in Yacktman Asset Management; and an opening date announcement by AdvisorShares for its Global Echo ETF.
In addition, State Street Global Advisors launched a Upromise 529 plan; Gemini Fund Services and Cole-Frieman Mallon & Hunt announced the launch of a shared trust; and Lincoln Financial announced the enhancement of its LifeSpan program with Ibbotson model portfolios.
Here are the latest developments of interest to advisors:
1) iShares Launches Emerging Markets Corporate-Bond ETF
BlackRock, Inc. announced Thursday that its iShares ETF business has launched the first index-based ETF focused on corporate bonds in emerging market countries. The iShares Emerging Markets Corporate Bond Fund (CEMB) offers broad access to dollar-denominated, investment grade and high-yield bonds issued by corporations based in Latin America, Eastern Europe, the Middle East, Africa and Asia. An Irish-domiciled fund with the same exposure listed earlier the same day on the London Stock Exchange.
Both funds are benchmarked to the Morningstar Emerging Markets Corporate Bond Index, a customized, investable index that utilizes built-in liquidity screens and a 5% issuer cap. The top three country holdings are Brazil (19.0%), Mexico (11.8%) and Russia (11.6%).
2) Global X Funds Launches MLP ETF
Global X Funds announced Thursday that it has launched the Global X MLP ETF (MLPA), which provides a comprehensive benchmark of the MLP industry while maintaining a fee of 0.45% versus the industry average of 0.85%. MLPA potential tax features include 1099 tax reporting (no K-1s), qualified dividends, and IRA and 401k eligibility. The fund pays quarterly income distributions.
MLPA offers exposure to the Solactive MLP Composite Index, which is designed to be a MLP benchmark index for energy and resource master limited partnerships. As of April 17, the index consisted of 30 MLPs and the three largest components of the index were Energy Transfer Partners LP, Enterprise Products Partners, and Plains All American Pipeline LP.
3) Touchstone Investments Completes Acquisition of Old Mutual Funds
Touchstone Investments announced on April 16 the completion of its acquisition of selected fund assets of Old Mutual Asset Management’s (OMAM) U.S. mutual fund business that were previously managed by OMAM’s Old Mutual Capital subsidiary. The company announced the planned acquisition in October 2011.
Thirteen of the 17 acquired funds will retain their current Old Mutual-affiliated subadviser.
4) AMG Announces Investment in Yacktman Asset Management
Affiliated Managers Group, Inc. announced Wednesday that it has entered into a definitive agreement to acquire a majority equity interest in Yacktman Asset Management Co. After the closing of the transaction, the management partners of Yacktman will continue to hold a substantial portion of the equity of the business and direct its day-to-day operations.
With approximately $17 billion of assets under management, Yacktman is an investment manager specializing in large-cap equities through a value-oriented approach. It seeks to make investments in high-quality businesses at low valuations with the goal of generating outperformance over the long term. The firm was founded in 1992 by Donald Yacktman.
5) AdvisorShares Announces Global Echo ETF Launch Date
AdvisorShares announced Thursday that the Global Echo ETF (GIVE) will open for trading on Thursday, May 24. GIVE is a broadly diversified multimanager ETF with a focus on sustainable investment themes that seeks to achieve long-term capital appreciation with an emphasis on absolute (positive) returns and low sensitivity to a blend of traditional financial market indices, such as the S&P 500 Index, over a full market cycle. GIVE has four portfolio managers allocating to different investment strategies and asset classes.
GIVE will directly support the Global Echo Foundation, a 501(c)(3) charitable foundation co-founded by Philippe Cousteau Jr., providing funding solutions to many of the challenges facing the world community including social issues impacting women and children, environmental conservation and social entrepreneurship; 0.40% of the GIVE management fee will be contributed to the Global Echo Foundation. Additional amounts will be contributed by AdvisorShares to support Cousteau’s educational efforts and in addition, AdvisorShares will contribute additional basis points to charitable causes.
6) State Street Global Advisors Launches SSgA Upromise 529 Plan
State Street Global Advisors (SSgA), the asset management business of State Street Corporation, announced Tuesday the launch of the SSgA Upromise 529 Plan, marking a new arrangement with the State of Nevada and Upromise Investments, Inc. Designed to lower costs and simplify investment choices, the SSgA Upromise 529 Plan features investment strategies that will be implemented using State Street’s SPDR ETFs.
Nevada’s direct-sold Upromise College Fund 529 Plan has been re-named the SSgA Upromise 529 Plan, and will continue to be direct-sold as well as now available through fee-based RIAs. It now includes new portfolio options managed by SSgA’s investment solutions group, which specializes in managing and advising investors on asset allocation, risk management, portfolio construction and plan implementation. Upromise Investments, Inc., a leading administrator of 529 college savings plans, will remain as the program manager.
7) Gemini Fund Services and Cole-Frieman Mallon & Hunt Launch Shared Trust
Gemini Fund Services, LLC and Cole-Frieman Mallon & Hunt LLP announced Tuesday that they have partnered to launch Two Roads Shared Trust, a shared mutual fund trust, which will be overseen by an independent board of trustees. Two Roads is tailored to advisers such as hedge fund managers who wish to start alternative mutual funds. Funds will be able to join Two Roads in Q3 of 2012. Robert Frost’s poem “The Road Not Taken” inspired the new trust’s name.
Two Roads will be composed of separately managed, independent funds. By joining Two Roads, funds receive fund sales, board and regulatory compliance oversight, operational efficiency and economies of scale that they would not otherwise be able to obtain by themselves. Two Roads membership also entitles funds to introductions to broker-dealers and assistance with their marketing and distribution plans.
8) Lincoln Financial Enhances LifeSpan with Ibbotson Associates Custom Model Portfolios
Lincoln Financial Group’s retirement plan services business announced on April 12 enhancements to its LifeSpan customized model asset allocation program for employer-sponsored retirement plans. Lincoln now offers plan sponsors the option to engage with Ibbotson Associates, a registered investment advisor and wholly owned subsidiary of Morningstar, Inc., to provide discretionarily managed custom model portfolios with ERISA 3(38) coverage.
ERISA section 3(38) allows defined contribution plan sponsors to hire a registered investment manager and transfer investment-related liability to the investment manager for the oversight of plan investments. Now LifeSpan allows plan sponsors and consultants the option to delegate the fiduciary responsibility associated with developing, monitoring and updating the model portfolios to Ibbotson Associates. Ibbotson will create a series of model portfolios, including target date, target risk, and retirement income, based on its patented lifetime asset allocation methodology.
Read the April 16 Portfolio Products Roundup at AdvisorOne.