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Top Portfolio Products: T. Rowe Debuts Global Allocation Fund

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Portfolio Products logoNew products introduced over the last week include a new global allocation fund from T. Rowe Price; two new Japan-focused ETFs from Direxion; and a covered call ETF from Horizons USA.

In addition, KKR is acquiring PRA International and WBI Investments launched two new funds.

Here are the latest developments of interest to advisors:

1) T. Rowe Price Launches Global Allocation Fund

T. Rowe Price announced that it has launched the Global Allocation Fund (RPGAX), a broadly diversified asset allocation fund that seeks long-term total return from investments in U.S. and international stocks, bonds, cash and alternative investments. The fund may serve as a core holding or complementary portfolio.

Typically, RPGAX will invest 60% of assets in stocks, 30% in bonds and cash, and 10% in alternative investments. Approximately 40% of the fund’s total assets will be invested in international stocks and bonds across both developed and emerging markets. Its asset classes include international equities, diversified fixed income, and strategic diversifying asset classes.

Charles Shriver, who has 13 years of investment experience and has been with T. Rowe Price for 21 years, manages the fund. Stefan Hubrich, who is also the director of asset allocation research, will act as the associate portfolio manager.

2) Direxion Launches Japan-Focused ETFs

Direxion announced that it has launched two leveraged ETFs that track Japanese equity market performance. The Direxion Daily Japan Bull 3X Shares (JPNL) seeks to generate daily investment results, before fees and expenses, of 300% of the performance of the MSCI Daily TR Net Japan USD Index. The Direxion Daily Japan Bear 3X Shares (JPNS) attempts to achieve daily investment results, before fees and expenses, of 300% of the inverse of the performance of the same index, which is tied to the MSCI Japan Index, a free-float adjusted index designed to track the performance of Japanese company stocks listed on the Tokyo Stock Exchange, Osaka Stock Exchange, Nagoya Stock Exchange and JASDAQ.

The ETFs do not attempt to meet their investment goals over periods longer than one day, and there is no guarantee that their objectives will be met.

3) Horizons USA Launches Covered Call ETF

Horizons ETFs Management (USA), a member of the Horizons ETFs Group, announced that it has launched the Horizons S&P 500 Covered Call ETF (HSPX), an ETF that uses a covered call strategy designed to potentially generate additional income from the option-eligible stocks in the S&P 500.

HSPX generally seeks to provide exposure to the performance of the S&P 500 Stock Covered Call Index and will make monthly distributions of dividend and call option income. Horizons USA has an exclusive agreement with Standard & Poor’s to offer an ETF in the U.S. based on the index. HSPX uses a replication strategy and invests substantially all of its total assets in same securities of the index. It will generally own all the securities of the S&P 500 in substantially similar weights to the index, and will sell or write covered call options on up to 100% of each of the option eligible securities in the portfolio.

Separately, Horizons USA announced that Adam Felesky has been appointed head of Americas for the Horizons ETFs businesses across the U.S., Canada and Latin America. He is CEO of Horizons ETFs Management (Canada). He founded Horizons Canada in 2005 and also acts as CEO and director of all Horizons Canada’s operating subsidiaries.

4) KKR to Acquire PRA International

Clinical research organization PRA International announced recently that funds managed by KKR are acquiring PRA from San Francisco-based Genstar Capital. PRA is a global contract research organization (CRO) that provides outsourced clinical development services to the biotechnology and pharmaceutical industries. It has more than 5,300 employees located in over 50 offices worldwide.

The transaction, which is subject to regulatory approvals and other customary closing conditions, is expected to close in the third quarter.

5) WBI Investments Launches Two New Absolute Return Mutual Funds

WBI Investments announced the launch of two mutual funds, the WBI Absolute Return Balanced Plus Fund (no-load shares: WBPNX; institutional shares: WBBPX) and the WBI Absolute Return Dividend Income Fund (no-load shares: WBDNX; institutional shares: WBDIX).

Don Schreiber Jr., CEO and founder of the firm, will serve as co-portfolio manager for the funds, while Gary Stroik, vice president and portfolio manager for WBI Investments, will serve as lead.

WBPNX’s investment objectives are to seek current income and long-term capital appreciation, while also seeking to protect principal during unfavorable market conditions. Under normal market conditions, it will invest 25% of its net assets in the equity securities of domestic and foreign dividend-paying companies of any size market capitalization that the advisor believes have the capacity to increase dividends over time, and at least 25% in domestic and foreign fixed-income securities. Approximately 10% may be invested in non-dividend-paying equities and/or in option strategies to enhance returns or mitigate risk and volatility.

WBDNX’s investment objective is to seek long-term capital appreciation and current income. Under normal market conditions, it will invest at least 80% of its net assets in dividend-paying equity securities of foreign and domestic companies. Up to 20% may be invested in non-dividend-paying equities, domestic and foreign fixed income securities, ETFs, ETNs and/or option strategies.

Read the June 21 Portfolio Products Roundup at AdvisorOne.


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