In recent portfolio news, Vanguard cut fees on its 500 Index Fund ETF via a reverse share split, and Franklin Templeton launched two new global funds.
In addition, ETF Securities announced a new ETF building and management service for asset managers, Putnam said it would provide financial wellness services for 401(k) plan participants, and Everence and Praxis announced a $2 million commitment to a World Bank green bond.
Here are the latest developments of interest to advisors:
1) Vanguard Lowers VOO ETF Costs with Reverse Share Split
Vanguard announced Wednesday that it was planning a 1-for-2 reverse share split of its Vanguard 500 Index Fund ETF (VOO) shares. The move is seen as the latest volley in the ETF fee war, as Vanguard and other firms vie to drop ETF fees continually lower. The split, according to Vanguard, is expected to cut overall transaction costs to buy and sell shares of VOO. It will cut the bid-ask spread, which is seen as the latest area in which ETFs can slash fees.
The company said that the reverse split will increase the price per share with a proportionate decrease in the number of shares outstanding. The total market value of the shares outstanding will not be affected, except with respect to the redemption of fractional shares. Shareholders who end up holding fractional shares will find those shares redeemed for cash and sent to the broker of record, the company said. As of Oct. 24, shares will be offered on a split-adjusted basis. Conventional shares will not be affected by the move.
2) Franklin Templeton Launches Two New Global Funds
Franklin Templeton announced Thursday the launch of two new funds, the Franklin Global Government Bond Fund and the Franklin Global Listed Infrastructure Fund.
The Franklin Global Government Bond Fund invests in global government bond markets with a focus on investment-grade issues. Co-managed by John Beck and David Zahn, the fund seeks to maximize total investment return consisting of a combination of interest income and capital appreciation, and to achieve its objective by investing in fixed- or floating-rate debt securities and obligations issued by government and government-related entities located throughout the world and by taking opportunistic exposure to other securities, such as corporate bonds and mortgage-backed securities. It may also invest in investment-grade obligations issued by emerging market governments and make limited purchases of below investment-grade securities.
The Franklin Global Listed Infrastructure Fund seeks total investment returns, consisting of income and capital appreciation, by investing in the securities of infrastructure-related companies whose principal business is the ownership, management, construction, operation, utilization or financing of infrastructure assets around the world. The fund is co-managed by Wilson Magee and Jack Foster, and its investment universe includes companies across the infrastructure-related sectors of utilities, transportation and energy.