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Top Portfolio Products: Franklin Templeton to Buy Stake in K2

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Portfolio Products logoNew products introduced over the last week include a new inflation-protected securities fund from Nationwide and a new variable annuity from Allianz Life. Also in fund news, Goldman Sachs Asset Management is courting advisors with its Dynamic Allocation Fund, which will hit the three-year mark in January.

In addition, Franklin Templeton announced an agreement to acquire a majority stake in K2 Advisors, and Trademark Capital Management announced that it has been chosen by Emerald Asset Advisors to manage its newly renamed EAS Trademark Capital Global Fund.

Here are the latest developments of interest to advisors:

1) Franklin Templeton to Acquire Majority Stake in K2 Advisors

Franklin Resources, Inc., which operates as Franklin Templeton Investments, announced Wednesday that it has agreed to acquire a majority stake in K2 Advisors Holdings LLC. This acquisition will enhance Franklin Templeton’s alternative investments and multiasset solutions platforms.

K2 will use the proceeds to purchase all equity currently held by TA Associates and to retire all K2’s debt obligations. The current K2 management will not sell any of its interests at this time, and will receive no up-front consideration in this transaction. Beginning in 2016, Franklin Templeton will acquire the remainder of K2 over a multiyear period. The transaction is subject to certain conditions including regulatory approval and is expected to close in calendar Q4 2012.

William Douglass III and David Saunders, K2’s founding managing directors, have entered into long-term employment arrangements in connection with the transaction and will continue to manage the business. No changes are planned for the K2 investment management processes.

2) Goldman’s Quants Court Advisors with Dynamic Allocation Fund After Shutting Hedge Fund

A year after shutting its fallen-star Global Alpha hedge fund and replacing its quantitative investment strategies group head, Goldman Sachs Asset Management (GS) is back on track with a successful risk-management fund that targets RIAs as investors.

The Goldman Sachs Dynamic Allocation Fund (GDAFX), which is set to hit the three-year mark this coming January after an early 2010 launch, is a solid contender within Morningstar’s world allocation category, with $1.3 billion in assets, 1.39% in expenses and a year-to-date return of 8.45% as of Monday.

Read the full story on AdvisorOne.

3) Nationwide Funds Launches Nationwide Inflation-Protected Securities Fund

Nationwide Funds recently announced that it has launched a new mutual fund, the Nationwide Inflation-Protected Securities Fund (NIFAX/NIFIX), subadvised by Nationwide Asset Management. It has been established to provide investors with inflation protection as well as a liquid and low-risk investment option that can offer additional diversification.

The fund will primarily invest in Treasury Inflation Protected Securities (TIPS), U.S. Treasury-issued fixed-income securities that generate income and offer inflation-adjusted interest and principal payments, because they have a lower risk profile and, when used in a portfolio with other investments, can help diminish overall portfolio volatility. As a result, the new fund will also act as an underlying fund option in which the Nationwide Target Destination Funds may invest in order to obtain greater TIPS exposure. The fund’s A shares require a minimum investment of $2,000 and are expected to have an annual expense ratio of 0.80%.

4) Allianz Life Launches New Variable Annuity

Allianz Life Insurance Company of North America announced Wednesday that the Allianz Retirement Advantage Variable Annuity is now available within Wells Fargo Advisors’ asset advisor program. Designed exclusively for professionals working within the growing advisory services market, the product is a retirement solution that provides opportunities for tax-deferred growth potential or guaranteed lifetime income.

Allianz Retirement Advantage offers account choices with varying levels of protection, guarantees and investment options to complement a retirement portfolio, each with its own cost. The annuity provides clients working with a financial advisor at Wells Fargo Advisors new opportunities to add a level of protection to their portfolio that’s specifically designed for flexibility, legacy preservation, and lifetime income.

5) Trademark Capital to Manage EAS Global Equity Fund

Trademark Capital Management, Inc. announced Tuesday that it has been selected by Emerald Asset Advisors, LLC to manage the EAS Global Cycle Fund (A shares, EGCAX; C shares, EGCEX; I shares, EGCSX), now renamed the EAS Trademark Capital Global Fund. As subadvisor, Trademark will deploy its proprietary risk-based quantitative model developed by Trademark partner and portfolio manager Don Beasley.

Data-driven, the Trademark model quantifies risk through a methodology independent of individual decisionmaking, resulting in a disciplined, rules-based process with a tactical style and focus on risk mitigation. Its proprietary quantitative models apply to both macro-level allocations and individual security selection.

Read the Sept. 14 Portfolio Products Roundup at


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