Portfolio > Portfolio Construction

Top Portfolio Products: LPL Adds New Offerings to Wealth Platform

Your article was successfully shared with the contacts you provided.

New products introduced over the last week include four new portfolios on LPL Financial’s model wealth portfolios platform; a new equity income fund from MFS; and a new global infrastructure fund from Northern Trust.

In addition, New York Life introduced a variable annuity with an optional lifetime income rider and Mass Mutual introduced a flexible premium deferred income annuity. Also, Schwab announced cuts in ETF fees, and OppenheimerFunds announced that it has increased the number of its funds offering I shares.

Here are the latest developments of interest to advisors:

1) LPL Financial Launches New Offerings on Model Wealth Portfolios Platform

LPL Financial LLC, a wholly owned subsidiary of LPL Financial Holdings Inc. (LPLA), announced Tuesday that it has expanded its model wealth portfolios platform through the addition of two new portfolios from LPL Financial Research, as well as two managed alternative investment portfolios from Fortigent.

The new Quad-Core Income Portfolio seeks to replicate or beat the performance of core bonds while generating more income and the Quad-Core Balanced Portfolio seeks the return of a traditional 60/40 stock-bond portfolio with little or no sensitivity to rising interest rates. The Alternative Strategies and Alternative Strategies—Enhanced portfolios are geared to capture the performance of traditional equity/fixed income portfolios, but with lower volatility, reduced potential for loss of capital and lower correlation with other asset classes.

2) MFS Launches Equity Income Fund

MFS Investment Management announced Thursday that it has launched MFS Equity Income Fund (EQNAX). The fund invests in equity securities and seeks to generate total return through current income and capital appreciation, and is managed by Jonathan Sage, an investment officer and portfolio manager.

EQNAX invests primarily in income-producing equity securities. MFS invests the majority of the fund’s assets in dividend-paying common stocks, but may invest in other types of income-producing securities, including convertible securities, preferred stocks and REITs, and may also invest in nonincome-producing securities. The fund is available in multiple share classes (A, B, C, I, R1-R5) and can be purchased through financial advisors and other financial intermediaries at banks, broker/dealers and insurance companies as well as through certain retirement platforms.

3) Northern Trust Launches Global Infrastructure Fund

Northern Trust announced Tuesday the launch of the Northern Multi-Manager Global Listed Infrastructure Fund (NMFIX), which seeks total return through both income and capital appreciation. Under its investment strategy, at least 80% of assets will be invested in securities of infrastructure companies listed on a domestic or foreign exchange. Infrastructure firms include energy, transportation, communication and utility companies.

This is a global fund, and normally the fund will invest at least 40% in infrastructure companies tied to foreign countries, including emerging markets and frontier markets.

NMFIX’s total net operating expense ratio is 1.00%, and has a redemption fee of 2% on assets sold or exchanged within 30 days of purchase. The minimum investment is $2,500. It takes a multimanager approach, with assets allocated to multiple outside subadvisors using distinctive investment styles.

The Northern Trust Company of Connecticut will conduct manager research, selection, optimization and oversight. Investment subadvisors are Brookfield Investment Management and Macquarie Capital Investment Management.

4) New York Life’s Introduces Variable Annuity with Lifetime Income Rider

New York Life recently announced the introduction of an innovative variable annuity with an optional rider that guarantees a future lifetime income stream. The New York Life Income Plus Variable Annuity is a long-term investment that provides consumers the opportunity for tax-deferred savings, a variety of investment options to pursue market growth, access to their savings, and future protection for loved ones through a death benefit.

The optional Guaranteed Future Income Benefit Rider provides a minimum level of guaranteed lifetime income payments, which can be increased if markets perform well. This rider is available for an annual cost and can only be purchased with a single-premium amount at the time of application. The rider establishes a guaranteed income floor, and payments begin on a date of the client’s choosing. Income Plus also comes with a free Income Benefit Rider that allows clients to use their money in the annuity to purchase guaranteed lifetime income streams that begin when they want them to, but doesn’t provide the minimum level of guarantee at purchase.

5) MassMutual Introduces Flexible Premium Deferred Income Annuity

Massachusetts Mutual Life Insurance Company recently announced the launch of MassMutual RetireEaseChoice, a flexible premium deferred income annuity. It guarantees a specific amount of future income at the time a purchase payment is made. This guarantee is possible because assets within the contract are dedicated to meeting long-term retirement income needs. For that reason, MassMutual RetireEase Choice provides no contract value or withdrawal provisions. The only distributions made from the contract are in the form of annuity payments or a death benefit.

Without the impact of withdrawals, the annuity can guarantee a higher income amount at the time purchase payment(s) are made than traditional deferred annuities can guarantee. Although payouts can start as soon as 13 full months after the contract issue date, MassMutual RetireEase Choice is specifically designed to address future predictable income needs.

6) Schwab Slashes ETF Fees Up to 59%

Charles Schwab announced Friday, Sept. 21, that it had cut operating expense ratios on all of its proprietary ETFs, and also said that testing was underway on an ETF-only 401(k) option that might be available in late 2013 or some time in 2014.

Marie Chandoha, president, Charles Schwab Investment Management, was joined on the “Every Third Friday” conference call by Walt Bettinger, president and CEO of Charles Schwab. The call was opened with the announcement that, according to Chandoha, the firm was “making dramatic reductions to expense ratios for all Schwab ETFs.”

Read the full story on AdvisorOne.

7) OppenheimerFunds Expands Class I Shares Fund Lineup

OppenheimerFunds, Inc. announced recently that its I shares product lineup has expanded to 20 funds as 401(k) fee disclosure rules take effect. The Oppenheimer funds are: Developing Markets (ODVIX); Main Street Fund (OMSIX); International Small Company Fund (OSCIX); Capital Appreciation Fund (OPTIX); Global Fund (OGLIX); International Bond (OIBIX); Global Opportunities (OGIIX); Discovery (ODIIX); Global Strategic Income (OSIIX); Equity Income (OEIIX); Value (OGRIX); Small- and Mid-Cap Value (QSCIX); Global Allocation (QGRIX); Rising Dividends (OIRDX); International Growth (OIGIX); Core Bond (OPBIX); Commodity Strategy Total Return (QRAIX); Global Value (GLVIX); International Diversified (OIDIX); and Real Estate (OREIX).

Kathleen Beichert, senior vice president, retirement marketing, said of the move, “OppenheimerFunds has expanded its I Shares lineup to offer greater choice to plans that prefer to pay advisory and recordkeeping fees separately with an eye toward making fee details more transparent to retirement savers.” In addition, the firm has introduced a number of services to help financial advisors benchmark and optimize their plans.

Read the Sept. 23 Portfolio Products Roundup at