New developments over the last week include a report from Rothstein Kass indicating that women managing hedge funds provide higher returns and the announcement by IMCA of the winning academic paper in its 2012 competition.
Also, CapX Partners announced the closing of CapX IV, its $225 million SBIC debenture fund; and the FPA and Veralytic announced that Veralytic’s research on life insurance suitability will be available to FPA members at a discount.
In addition, Cook & Bynam Capital Management announced that it has lowered the net expense ratio on the Cook & Bynam Fund; Security Benefit Corp. introduced its new next-generation fixed indexed annuity; and J.P. Morgan Asset Management announced that it will increase market-based NAV disclosure for three money market funds.
Here are the latest developments of interest to advisors:
1) Rothstein Kass Report: Women Hedge Fund Managers Provide More Alpha
Rothstein Kass announced Thursday the release of “Women in Alternative Investments: Building Momentum in 2013 and Beyond,” the firm’s second annual report examining the performance, prospects and outlook of women in the alternative investment industry. The report focuses on the trends and opportunities for women in the industry, and proprietary performance analysis of women-owned or managed funds.
Results indicated that women hold the highest percentage of C-level jobs within the operational space, at 35.0%, followed closely by C-level compliance and financial positions, at 34.0% and 32.0%, respectively. The percentage of female CEOs and CIOs currently averages less than 20% within the firms polled. In addition, it found that women-owned or managed hedge funds historically performed ahead of the industry, and were also leading for the year to date through September 2012. The Rothstein Kass Women in Alternatives Hedge Index produced a YTD net return through September of 8.95%, compared with the HFRX Global Hedge Fund Index, which has generated a 2.69% net return through September. Furthermore, over a five-year period, the WAI Hedge Index outperformed both the HFRX Global Hedge Fund Index and the S&P 500.
2) IMCA Announces First Academic Paper Competition Winner
Investment Management Consultants Association (IMCA) announced on Thursday the winner of its 2012 Journal of Investment Consulting Academic Paper Competition. The winning paper, “Monitoring Daily Hedge Fund Performance When Only Monthly Data is Available,” addresses a common problem related to time lag that confronts investors who wish to monitor their hedge funds on a daily basis. The paper’s authors are Russ Wermers, associate professor of finance, Robert H. Smith School of Business, University of Maryland at College Park; Daniel Li, research analyst, Markov Processes International LLC; and Michael Markov, chairman, Markov Processes International LLC. The paper will be published in the next issue of the Journal of Investment Consulting, and winners receive a $5,000 cash award. The competition called for papers that examine recent research relevant to investment consulting and private wealth management, and provide a development of theory and applied research related to risk management. Paper submissions were invited from nontenured faculty and doctoral students. The Journal of Investment Consulting editorial advisory board selected the winning paper based on quality and relevancy of the research to investment management consultants and investment advisors.
3) CapX Partners Closes $225 Million SBIC Debenture Fund
CapX Partners announced Thursday the close of its latest fund with total commitments of $225 million. CapX IV closed at the end of 2012 with $75 million of private capital. With its SBIC debenture license, CapX IV now has access to an additional $150 million in debenture leverage funding from the SBIC.
The SBIC program is a federally funded, public-private program created in 1958 to enhance access to investment capital for small business. Total financings to businesses through the SBIC debenture program grew to a 54-year record high of $2.95 billion in fiscal year 2012.
4) FPA, Veralytic Announce Alliance to Provide More Research Access
Veralytic and the Financial Planning Association (FPA) announced Wednesday an agreement to license Veralytic’s life insurance pricing and performance research at discounted prices for FPA members. The Veralytic research consists of several measures of policy suitability in a graphical overview, summarized by a star rating system that measures against five different categories of policy performance. The validity and utility of the research has been recognized by national industry publications as well as regulatory and oversight agencies.
The research will be an addition to FPA’s Practitioners Resource Guide. FPA members can sign up online for a discounted monthly subscription for unlimited reports.
5) 5-Star Cook & Bynum Fund Lowers Its Expenses
The three-year-old fund earned a five-star ranking from Morningstar on Dec. 31, as well as a five-star ranking from Standard & Poor’s Capital IQ on Oct. 26. Morningstar’s ranking of COBYX’s fee level prior to the lowering of expenses was “high.”
6) Security Benefit Corp. Introduces New Next-Gen Fixed Indexed Annuity
On Wednesday, Security Benefit Corp. introduced Foundations Annuity, a next-generation fixed indexed annuity (FIA). Security Benefit Life Insurance Co., a Guggenheim Partners company, designed the annuity to protect principal, provide a guaranteed income stream for life and an interest-crediting opportunity tied to equity-market growth, and allow retirees greater liquidity than was associated with prior-generation FIAs.
Foundations Annuity offers, in addition to a guarantee of principal and a 1% bonus on first-year premium payments, three interest-crediting strategies tied to potential equity market growth. It also offers an optional guaranteed life withdrawal benefit (GLWB) rider with guaranteed payout rates and less complexity than many FIAs. 7) J.P. Morgan Asset Management to Increase Market-Based NAV Disclosure
J.P. Morgan Asset Management announced Wednesday that three of its U.S. money-market funds will begin to disclose their market-based NAVs per share (also known as shadow NAVs) on a daily basis. This additional disclosure will provide investors with greater transparency regarding the market-based NAVs’ fluctuation, but will not change the funds’ existing objective to maintain $1 stable NAV.
Beginning Jan. 14, the JPMorgan Prime Money Market Fund (VMVXX), JPMorgan Liquid Assets Money Market Fund (MJLXX) and the JPMorgan Current Yield Money Market Fund (JCCXX) will calculate their market-based NAVs per share to four decimals at the funds’ close of each trading day and disclose it the following business day on its website. J.P. Morgan plans to add market-based NAVs disclosure for its other money market funds in the near future.
Read the Jan. 4 Portfolio Products Roundup at AdvisorOne.