New products and changes introduced over the last week include a new emerging markets value fund from American Century Investments; collaring as an alternative to bonds by Summit Portfolio Advisors; and a fund with direct access to China’s market from Deutsche Asset & Wealth Management.
In addition, two nonprofits are making an online retirement tool available free for Veterans Day to active-duty and retired servicemembers and their families, and New York Life has launched 401(k) planning whiteboards for participants.
Here are the latest developments of interest to advisors:
1) American Century Offers Emerging-Markets Value Fund
American Century Investments announced Thursday the launch of its Emerging Markets Value Fund, available in investor, institutional, A, C and R share classes. Its investment strategy utilizes a two-step process to identify undervalued securities. First, the portfolio managers use quantitative models to rank the stocks of publicly traded companies in emerging-market countries, seeking companies with characteristics similar to those that make up the MSCI Emerging Markets Value Index. Second, portfolio optimization techniques are used to balance risk and expected return, with the goal of creating a fund that provides better returns than its benchmark without significant additional risk.
The fund is managed by the firm’s quantitative equity team in Mountain View, Calif., consisting of Vinod Chandrashekaran, director of quantitative research; Yulin Long, portfolio manager; and Elizabeth Xie, portfolio manager.
2) Summit Portfolio Advisors Offers Collaring in SMAs
As a replacement to its closed Collar Fund (COLLX), Summit Portfolio Advisors LLC (SPA) has announced that it is offering its collar strategy in separately managed accounts (SMAs). For SMAs, the strategy will collar the SPDR ETF SPY, which tracks the Standard & Poor’s 500 index. This enables the strategy to capitalize on SPY’s low expense ratio, high liquidity and broad range of option expirations and strike prices. The goal of the strategy is to capture equity index returns within the upper and lower boundaries of the collar.
SPA points out that collaring can be used as an alternative to investing in bonds. When a stock is collared with the purchase of a put option and the sale of a covered call option, the downside and upside potential are both limited, regardless of the movement of the underlying stock. This can reduce volatility to bondlike levels. Collaring also changes the timing of equity distributions and retains high equity correlation.
3) Retirement Planning Tool Free for Vets, Active Duty Military on Veterans’ Day
Active duty and retired military and widows and widowers of the fallen are being offered free access on Veterans Day to an online retirement planning tool detailing how to make the most of retirement income from Social Security. The Investor Protection Institute and Investor Protection Trust, both nonprofits, are working with Social Security Solutions and the Kiplinger Washington Editors on the free-for-a-day offer.
The online tool from Social Security Solutions crunches an individual’s Social Security income information to deliver a recommended claiming strategy based on life-expectancy projections that aims to maximize lifetime benefits. Delaying claiming Social Security until age 66 will avoid the reduction in benefits that comes with claiming at age 62; waiting to claim benefits till age 70 will increase benefits. On November 11, active duty military and veterans can access the tool at www.SocialSecurityforVeterans.com. They will need to enter name, age and marital status, as well as their Primary Insurance Amount (PIA), which is the estimated monthly Social Security benefit they will receive if they start benefits at full retirement age.
4) China Fund Launched by Deutsche Asset & Wealth Management
Deutsche Asset & Wealth Management for the Americas has announced the db X-trackers Harvest China Fund (ASHR), which tracks the CSI 300 Index, comprising the 300 largest and most liquid stocks in the China A-share market, and offers direct access to China’s market.
ASHR is subadvised by Harvest Global Investments Limited, which will avoid counterparty risks encountered when accessing A shares via derivative securities by means of a renminbi-denominated qualified foreign institutional investors (QFII) license.
5) Whiteboards Launched by New York Life Retirement Services
New York Life Retirement Plan Services announced that it has launched a new video series of animated “whiteboards” illustrating the importance of retirement planning concepts for 401(k) plan participants.
The MyLifeNow Chronicles, offered as a standard part of New York Life’s participant communications suite, is a new video series weaving together videoscribing, animation, and narration on core topics such as saving more and taking full advantage of a company match. The video series was rolled out across the firm’s defined contribution plan platform in late September.
Read the Oct. 27 Portfolio Products Roundup at ThinkAdvisor.