Just a week after Vanguard and PIMCO rolled out emerging bond funds, Goldman Sachs is sharing a global bond fund with investors. In addition, FPA Funds announced the conversion of its funds to no-loads.
Meanwhile, Lincoln Financial’s has a new Treasury-indexed universal life policy; there’s a new lifetime income annuity from ING U.S., as well as a new variable annuity from Forethought Financial Group.
Here are the latest developments of interest to advisors:
1) Goldman Sachs Launches World Bond Fund
Goldman Sachs Asset Management (GS) announced Wednesday the launch of the Goldman Sachs World Bond Fund (A shares, GWRAX), which invests in fixed income securities and currencies across the developed and emerging markets. It seeks to capture debt sustainability dynamics for government bond market returns, while attempting to generate higher yield and lower volatility compared to traditional funds.
GWRAX is benchmarked to the Barclays Global Sovereign Fiscal Strength Index, which incorporates elements of the Barclays GDP and Fiscal Strength indices, and combines them with a GSAM-developed methodology that favors countries with strong fundamentals over those under some form of fiscal stress.
GWRAX allocates primarily to global sovereign bonds and sovereign-related debt. Its currency exposure is unhedged. Its A and C shares have $1,000 minimum initial investments; it also offers institutional, R and IR shares.
2) FPA Funds Announces Conversion to No-Load Fund Family
FPA has announced that effective April 1, all of the FPA funds will be available as no-load funds. This means that each FPA fund will be available for direct purchase by the public without any front-end sales charges.
It is important to note that any trade or trade adjustment transmitted to the funds or UMB Fund Services after March 28 will be processed without a sales charge regardless of the actual trade date.
This change will only affect FPA Capital Fund (FPPTX), FPA New Income (FPNIX), FPA Paramount Fund (FPRAX) and FPA Perennial Fund (FPPFX), since these funds are currently structured as front-load mutual funds.
The FPA Capital Fund will remain closed to new investors. In addition, shareholders of FPA Crescent Fund (FPACX) and FPA International Value Fund (FPIVX) will now be able to exchange between the other FPA funds without the hurdle of having to pay the front-end sales charge.
3) Lincoln Financial Introduces Treasury-Indexed Insurance Product
Lincoln Financial Group announced Tuesday the introduction of its Lincoln Treasury Indexed Universal Life (IUL) solution designed to capture the benefits of a potential rise in interest rates. This provides a baseline death benefit, with the flexibility to improve and customize coverage over time based on the performance of the 10-year Treasury yield.
Lincoln Treasury Indexed UL policyholders choose their initial duration of guaranteed coverage at issue, and receive a guaranteed schedule of earned credit factors that correspond to different levels of 10-year Treasury yields.
With scheduled premiums paid on time, policyholders can apply the credits as a premium election to either extend coverage beyond the initial coverage duration or reduce out-of-pocket premiums for the initial coverage duration; withdraw the credits as cash; or leave the credits in the policy account value (in all years except year one).
4) ING U.S. Introduces New Lifetime Income Annuity
ING U.S. announced Tuesday that it has launched a new retail product, the ING Lifetime Income single premium deferred fixed annuity, issued by ING USA Annuity and Life Insurance Company. This annuity provides two opportunities to step up income, based on the number of years an individual delays the start of income withdrawals. If income payments are deferred for five years, the available income withdrawal amount is boosted by 150%. With a 10-year deferral, it gets instead a guaranteed 225% boost.
Another possibility for income growth is linked to changes in the S&P 500 Index. If the index is higher at the end of a contract year than at the beginning, the available income amount increases by this percentage, subject to an annual cap on the amount of this increase. The index cap is currently 6% and is fixed for the life of the contract. The step-up benefit and index-linked growth increase the benefit value, which is used to determine the income withdrawal amount only and do not increase the contract’s account value.
5) Forethought Launches ForeRetirement Variable Annuity
Forethought Financial Group, Inc., through its Forethought Life Insurance Company subsidiary, has launched the ForeRetirement variable annuity with daily benefit options, available in B, C and L share classes, marking the company’s first entry into the variable annuity marketplace.
ForeRetirement features optional living benefits for income needs, as well as death benefit options for legacy objectives, including choices with daily growth potential. The product launch also coincides with a complete redesign of the company’s website, Forethought.com, with updated features and intuitive interface.