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Top Portfolio Products: Low-Volatility Fund, More Admiral Shares From Vanguard

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New products and changes introduced over the last week include an actively managed equity fund from Vanguard; a long-short fund from Newberger Berman; new fund names and indexes for 10 of Invesco’s existing funds and the closure of 4 others; and private placement opportunities from Miller Tabak on the platform.

Here are the latest developments of interest to advisors:

1) Vanguard Adds Actively Managed Equity Fund

Vanguard has announced the launch of its Global Minimum Volatility Fund (VMVFX), designed to provide long-term capital appreciation with lower volatility relative to global equity markets. VMVFX, which will be solely managed by the in-house equity investment group, will employ quantitative models to evaluate the securities in the fund’s FTSE Global All-Cap Index (USD Hedged) benchmark in order to construct a global equity portfolio.

It is expected to invest approximately half of its assets in foreign company stocks and the other half stocks, and to use forward currency contracts to hedge most of its non-U.S. positions to the U.S. dollar. VMVFX offers two share classes. Investor shares will have an estimated expense ratio of 0.3% and require a minimum initial investment of $3,000, while admiral shares will have an estimated expense ratio of 0.2% and require a minimum initial investment of $50,000.

2.) Vanguard Expands Admiral Shares to Dividend Appreciation Fund

Vanguard also says its $22.8 billion Vanguard Dividend Appreciation Index Fund is now available in Admiral Shares (VDADX), expanding number of Vanguard funds that offer these “ultra-low-cost shares” to 84.

The estimated expense ratio for Admiral Shares of the Dividend Appreciation Index Fund is 0.10%.

“With Admiral Shares, investors are paying mutual fund fees that are among the lowest available,” said Vanguard CEO Bill McNabb, in a press release. “Making this share class an option for more than half of our fund family demonstrates our commitment to reducing the cost of investing for our clients whenever possible.”

More than $700 billion—about one-third of Vanguard’s more than $2.4 trillion in U.S. fund assets under management—is currently held in Admiral Shares.

Currently, 50 index funds and 34 actively managed funds offer Admiral Shares. To qualify for Admiral Shares of Vanguard Dividend Appreciation Index Fund, retail investors are subject to a $10,000 minimum investment requirement; advisors and institutions are not subject to a minimum.

3.) Neuberger Berman Rolls Out Long-Short Product

Neuberger Berman Group has launched the Neuberger Berman Long Short Multi-Manager Fund (NLMIX, NLMAX, NLMCX). The new fund “seeks long-term capital appreciation with a secondary objective of principal preservation by allocating its assets to a select group of external hedge fund advisers that employ distinct long short strategies investing primarily in equity securities of companies throughout the world.”

Unlike traditional hedge funds, Neuberger Berman says, the fund provides daily liquidity, lower investment minimums ($1,000 for Class A and C shares), and 1099s for shareholders, while offering full transparency of portfolio holdings without a performance-based management fee.

It employs the risk management and monitoring, mix of managers and long short strategies, and operational due diligence traditionally available only to institutional and high-net-worth investors through traditional hedge funds.

The fund is managed by members of the Neuberger Berman Hedge Fund Solutions group serving the needs of institutional and high-net-worth investors since 2002, including David Kupperman, Ph.D., managing director; Jeff Majit, managing director; Ian Haas, senior vice president; Fred Ingham, managing director; and Eric Weinstein, managing director. The team currently manages the $630 million Neuberger Berman Absolute Return Multi-Manager Fund, introduced in 2012. Overall, Neuberger Berman currently manages over $42 billion in mutual fund assets.

 “We believe ‘liquid alternatives’ – hedge fund strategies in a mutual fund format – can present attractive solutions for investors who have not been able to access traditional hedge funds as well as for defined contribution plan sponsors seeking to provide their participants with a full range of investment options,” said David Kupperman, in a statement.

Subadvisers for the Neuberger Berman Long Short Multi-Manager Fund are: Cramer Rosenthal McGlynn, LLC and Lazard Asset Management LLC, both for global long short equities; Levin Capital Strategies, L.P. for utilities long short investments; SLS Management, LLC for equity restructuring long short investments; and Turner Investments, L.P. for healthcare sector long short.

4) 10 Invesco Funds Get New Names, Indexes; Four Funds Close

Invesco PowerShares Capital Management LLC announced Wednesday that it is changing the underlying indexes and names of 10 ETFs. In addition, it also announced plans to close four ETFs.

The ETF changes are as follows:

  • Dynamic OTC Portfolio (PWO) will become DWA NASDAQ Momentum Portfolio, and its ticker will also change to DWAQ;
  • Dynamic Basic Materials Sector Portfolio (PYZ) will become DWA Basic Materials Momentum Portfolio;
  • Dynamic Consumer Discretionary Sector Portfolio (PEZ) will become DWA Consumer Cyclicals Momentum Portfolio;
  • Dynamic Consumer Staples Sector Portfolio (PSL) will become DWA Consumer Staples Momentum Portfolio;
  • Dynamic Energy Sector Portfolio (PXI) will become DWA Energy Momentum Portfolio;
  • Dynamic Financial Sector Portfolio (PFI) will become DWA Financial Momentum Portfolio;
  • Dynamic Healthcare Sector Portfolio (PTH) will become DWA Healthcare Momentum Portfolio;
  • Dynamic Industrials Sector Portfolio (PRN) will become DWA Industrials Momentum Portfolio;
  • Dynamic Technology Sector Portfolio (PTF) will become DWA Technology Momentum Portfolio; and
  • Dynamic Utilities Portfolio (PUI) will become DWA Utilities Momentum Portfolio.

In addition, the final day of trading for the following four ETFs will be Feb. 18: KBW International Financial Portfolio (KBWX); MENA Frontier Countries Portfolio (PMNA); Dynamic MagniQuant Portfolio (PIQ); and Lux Nanotech Portfolio (PXN).

5) Convergence Investment Partners Launches Second Mutual Fund

Convergence Investment Partners has announced the launch of its second mutual fund. The Convergence Opportunities Fund (CIPVX) focuses on investing in small- to mid-cap stocks.

CIPVX seeks to generate returns by identifying not only value, but also what the market is valuing. By incorporating the ability to short, the fund strives to provide additional alpha above similar long-only strategies. The fund was launched in collaboration with Montage Investments, Convergence Investment Partners’ parent company.

6) Larkin Point Introduces Equity Preservation Fund

Larkin Point Investment Advisors LLC has announced the launch of its Equity Preservation Fund (LPIUX, LPAUX), which targets growth while seeking protection and balance.

The fund is managed by a team headed by Michael Winchell, chief investment officer, and Charlie Hon, portfolio manager, is administered by Gemini Fund Services, LLC and is a series of the Two Roads Shared Trust.

7) Miller Tabak and FNEX Announce Opportunities on

Miller Tabak +Co., LLC and FNEX have announced that Miller Tabak will offer select private placement investment opportunities on the platform.

The Web-based platform, which was launched in September, has attracted agreements from listing banks that project approximately 140 private placements in the next 12 months that nearly $3 billion in total capital raise goal.

8) AssetMark Trust Company Introduces CashAdvantage Lending

AssetMark Trust Company, an affiliate of AssetMark Inc., has announced that it has added CashAdvantage Lending to its services. It allows advisors to help clients set up an interest-only revolving credit line from The Bancorp that provides a suite of banking services to clients of AssetMark Trust Company.

The borrower’s CashAdvantage credit limit is determined by the value and type of underlying collateral in the portfolio. Lending may be linked to any like-titled nonretirement account, including individual, joint, business entities and trust accounts. There are no fees associated with maintaining these accounts, and using the CashAdvantage may also reduce or eliminate the potential tax consequences of liquidating assets. A mobile app is also being developed.

Read the Dec. 13 Portfolio Products Roundup at ThinkAdvisor.


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