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Top Portfolio Products: Schwab Adds Commission-Free ETFs

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New products and changes introduced over the last week include the addition of five commission-free ETFs to Schwab ETF OneSource, a sustainable investing fund from Thornburg and managed accounts for 401(k)s from MassMutual and Envestnet.

Also, Vanguard announced manager and benchmark index changes, Informa Investment Solutions added a cloud-based investment allocator application, Voya Financial added an index crediting strategy to its fixed indexed annuity products and Lombard International launched its global life insurance-based wealth management business.

Here are the latest developments of interest to advisors:

1) Schwab Adds Commission-Free ETFs to OneSource

Schwab announced the addition of five commission-free ETFs to Schwab ETF OneSource. All are currency-hedged ETFs.

The additions are IQ 50 Percent Hedged FTSE Europe ETF (HFXE), IQ 50 Percent Hedged FTSE Intl ETF (HFXI), IQ 50 Percent Hedged FTSE Japan ETF (HFXJ), ProShares Hedged FTSE Europe ETF (HGEU) and ProShares Hedged FTSE Japan ETF (HGJP).

2) Thornburg Launches Sustainable Investing Fund

Thornburg Asset Management launched the Thornburg Better World International Fund (TBWAX, TBWIX, TBWCX) which focuses on 30 to 60 value-oriented international companies. Managed by Rolf Kelly, the fund is designed to seek a high level of risk-adjusted returns by investing in high-quality, attractively priced companies making a positive impact on the world.

3) Vanguard Announces Windsor II Fund Transition, Index Funds’ Move to FTSE

Vanguard announced that portfolio management responsibilities for the Vanguard Windsor II Fund and the diversified value portfolio of the Vanguard Variable Insurance Fund (VVIF) will transfer from James Barrow, founding partner and executive director of Barrow, Hanley, Mewhinney & Strauss, LLC, to Jeff Fahrenbruch and David Ganucheau, effective January 1.

Fahrenbruch and Ganucheau have served on the portfolio management team of the Windsor II Fund and VVIF Diversified Value Portfolio since 2013. Barrow will remain actively involved in the firm’s investment activities and continue as a portfolio manager of the Vanguard Selected Value Fund. Barrow, Hanley manages approximately 60% of both the Windsor II and Selected Value funds.

In addition, Vanguard announced that the Vanguard European Stock Index Fund and the Vanguard Pacific Stock Index Fund began tracking new FTSE indexes on October 1. The funds transitioned from FTSE benchmarks containing large- and mid-cap stocks to broader FTSE benchmarks that include large-, mid-, and small-cap stocks. The European Stock Index Fund is now tracking the FTSE Developed Europe All Cap Index and the Pacific Stock Index Fund is tracking the FTSE Developed Asia Pacific All Cap Index.

Adding small-cap exposure to the funds moves investors closer to market-cap weightings and fuller diversification benefits. The benchmark changes include all share classes of the two funds, including their ETF share classes, FTSE Europe ETF (VGK) and FTSE Pacific ETF (VPL).

4) MassMutual, Envestnet Introduce 401(k) Managed Accounts

MassMutual and Envestnet Retirement Solutions, LLC (ERS) teamed up to launch managed accounts for 401(k)s and other retirement savings plans. The RetireSmart Ready Managed Path accounts are actively managed by ERS on an ongoing basis to ensure that the investments remain appropriate for the participant’s objectives. Employers can use the accounts in two ways: as personalized investment strategies available for selection by participants or as a qualified deferred investment alternative (QDIA) available in plans that automatically enroll employees or when participants  fail to select investments.

5) Informa Investment Solutions Adds Asset Allocator

Informa Investment Solutions released Asset Allocator, a cloud-based application that provides asset allocation, optimization and portfolio simulation for investment professionals.

The interactive solution allows advisors, consultants, and plan sponsors to identify the optimal mix of assets based on the client’s goals and risk tolerance. Additionally, wirehouses will be able to set up permissions for different groups, such as advisors and portfolio managers, with individual usernames and passwords.

6) Voya Financial Adds Index Crediting Strategy

Voya Financial added an index crediting strategy within the company’s Voya Secure Index series and Retirement Index Select fixed index annuity product lines.

The Voya Point-to-Point Volatility Control Strategy features Deutsche Bank’s proprietary CROCI (cash return on capital invested) U.S. 5% volatility control index, which aims to reduce volatility by allocating between select U.S. stocks and cash and provide customers a level of protection from downturns in the market.

7) Lombard International Launches Global Wealth Management Business

Lombard International formally launched its global life insurance-based wealth management business, following the integration of U.S.-headquartered Philadelphia Financial with Luxembourg-headquartered Lombard International Assurance.

The new business was introduced under the relaunched global brand of Lombard Internationa. It provides multi-jurisdictional wealth planning solutions through its partner networks across the U.S., Europe and Latin America, including life insurance policies and annuities from the U.S., Luxembourg, Guernsey and Bermuda.

— Read the September 25 Portfolio Products Roundup on ThinkAdvisor.


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