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Top Portfolio Products: State Street Rolls Out Two Corporate-Bond ETFs

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Portfolio Products logoNew products introduced over the last week include two new SPDR ETFs announced by SSgA and an ecological ETF launched by Huntington Asset Advisors.

In addition, Market Vectors ETFs announced a new Australian unit; Partners Group closed its Global Real Estate 2011 program; CAIS added private equity to its platform; and Nationwide Funds Group announced the elimination of redemption fees.

Here are the latest developments of interest to advisors:

1) SPDR BofA Merrill Bond ETFs Launched

State Street Global Advisors (SSgA), the asset management business of State Street Corp., announced Tuesday the beginning of trading on the SPDR BofA Merrill Lynch Crossover Corporate Bond ETF (XOVR) and the SPDR BofA Merrill Lynch Emerging Markets Corporate Bond ETF (EMCD).

XOVR, with an expense ratio of 0.30%, seeks to track the performance of the BofA Merrill Lynch US Diversified Crossover Corporate Index, which is designed to measure the performance of U.S. dollar-denominated BBB and BB corporate debt publicly issued in the U.S. domestic market. Qualifying securities must be rated BBB1 through BB3 inclusive (based on an average rating of Moody’s Investors Service Inc., Standard & Poor’s Inc. and Fitch, Inc.) have a fixed-income coupon schedule, have at least one year remaining to final maturity, and a minimum amount of outstanding of $250 million or more of issuance.

For EMCD, with an expense ratio of 0.50%, individual securities of qualifying issuers must be denominated in U.S. dollars, be senior or secured debt, have at least one year remaining to final maturity, a fixed coupon and $500 million or more in outstanding face value.

2) Market Vectors Announces Investment Pact with Australian Index Investments

Market Vectors ETFs announced Tuesday that its investment advisor, Van Eck Associates Corp., entered into an investment agreement with Australian Index Investments (AII) on June 7. The resulting company is a majority subsidiary of Van Eck Associates Corp. and will be renamed Market Vectors Australia Pty. Ltd. Market Vectors Australia will market and distribute ETFs, including six existing AII ETFs, to the Australian marketplace. The company currently oversees approximately AUD $30 million in investor assets.

The current AII staff will be retained and led by CEO Annmaree Varelas, who has served as CEO for two years. She also has extensive experience as manager of funds, warrants and structured products at the Australian Securities Exchange and was instrumental in establishing the AQUA Market for ETFs in Australia.

3) Huntington Asset Advisors Launches Ecological Strategy ETF

Huntington Asset Advisors announced Tuesday the launch of the Huntington EcoLogical Strategy ETF (HECO) through its new ETF family, Huntington Strategy Shares. The ETF is managed by Brian Salerno, who joined Huntington in 2005 and has nearly 20 years of experience in the investment management industry. HECO has a goal of capital appreciation and will focus on ecologically focused companies and products, which are positioned to take advantage of continuing changes in laws, consumer behavior and business investments. It holds stocks from companies large and small across a widely diversified set of industries that demonstrate environmental stewardship and provide products and services that advance green practices and show evidence of sustainability. With this approach, the ETF may be more correlated to market indices, like the S&P 500, than specific green funds that target clean tech or alternative energy, which may be more limited in scope.

4) Partners Group Closes Global Real Estate 2011 Program

Partners Group announced Wednesday that it has closed its Partners Group Global Real Estate 2011 L.P. at over $800 million.

Pamela Alsterlind, co-head private real estate, said, “Global real estate markets provide a wide variety of attractive investment opportunities, mainly due to the continued distress in developed markets like the U.S., Europe and Japan as well as the growth opportunities in Asia-Pacific and Latin America. At Partners Group we evaluate the global opportunity set every six months.”

5) CAIS Platform Expands Product Menu

CAIS announced Thursday that it has expanded its menu of alternative investment funds and products to include private equity. Private equity firm Partners Group has selected CAIS to help reach the U.S. independent wealth management channel.

Through CAIS, advisors will be able to access a global private equity portfolio that includes direct, secondary and primary private equity investments, diversified across multiple industries, geographic regions and vintage years.

6) Nationwide Funds Group Eliminates Redemption Fees

Nationwide Funds Group announced Thursday that it will eliminate all redemption fees on its retail and retirement plan mutual funds, effective Aug. 1. The change is designed to make it easier for clients to work with Nationwide and help drive asset growth for the company and financial advisors.

“Redemption fees were originally imposed to deter market timing and late trading in mutual funds,” said Michael Spangler, president of Nationwide Funds Group. “Nationwide Funds Group has made a number of advances in an effort to detect and reduce excessive trading, short-term trading or market timing activity. We believe these advances eliminate the need for redemption fees in our funds and will create the potential for growth and efficiency for financial advisors and their clients.”

Read the June 15 Portfolio Products Roundup at AdvisorOne.


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