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Portfolio > Portfolio Construction

Guggenheim Launches Multi-Factor Large-Cap ETF: Portfolio Products

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Guggenheim Investments announced the addition of Guggenheim Multi-Factor Large-Cap ETF (GMFL), which selects stocks with the most attractive exposures to a diverse set of seven uncorrelated factors – value, growth, quality, momentum, short interest, volatility and liquidity.

“While many multi-factor strategies favor popular factors, like value, quality, or momentum, Guggenheim has advanced multi-factor investing by combining seven factors, both fundamental and non-fundamental, that seek to offer more stable performance across market cycles,” said William H. Belden, Managing Director and Head of ETF Business Development for Guggenheim Investments.

GMFL seeks to track the performance of the Guggenheim Multi-Factor Large-Cap Index, designed to identify attractive companies with strong performance potential via a multi-factor approach. The index is comprised of a focused basket of approximately 50 stocks selected from the S&P 500 Index.

The underlying index security selection process employs a Multi-Factor Composite Score, which is a proprietary rules-based methodology that seeks to identify component securities with attractive exposures to fundamental (value, growth and quality) and non-fundamental (momentum, short interest, volatility and liquidity) factors.

The index seeks to have a similar sector exposure as the S&P 500 Index but unlike the S&P 500 its constituents are equally weighted, and they’re reconstituted quarterly.

“Although performance in the market may be driven at times by narrow factors that work well in the short term, the strategy selects stocks based on multiple factors based on long-standing research that may provide more consistent and reliable performance,” Belden said in a statement.

VictoryShares Launches Minimum Volatility ETF  

Victory Capital launched the VictoryShares US Multi-Factor Minimum Volatility ETF (VSMV), which began trading on the Nasdaq Stock market on June 22. The new ETF seeks to provide investment results that track the performance of the Nasdaq Victory US Multi-Factor Minimum Volatility Index (NQVMVUS).

The index employs a two-step approach that aims to deliver superior risk-adjusted equity returns, while potentially minimizing overall expected volatility relative to the U.S. broad market. Step one screens for more durable companies by isolating certain characteristics such as momentum, quality, value and growth potential. Step two optimizes the portfolio to ensure diversification and to help reduce overall index volatility.

The VictoryShares ETF platform, which has grown to approximately $1.5 billion in AUM as of May 31, 2017, is designed to provide investors with rules-based solutions that help bridge the gap between the active and traditional passive elements of their portfolios.

NAPA Rolls Out Small Plan RFP Template

The National Association of Plan Advisors has developed a template designed to make it easier for advisors to obtain consistent, apples-to-apples comparison of service features from 401(k) recordkeepers.

The NAPA Recordkeeping Platform Assessment Template was designed to highlight critical service elements in a manner that makes it easy and efficient for recordkeepers to respond in a consistent manner, simplifying the comparison process for retirement plan advisors and the small business owners they support.

The template was also designed for smaller plans (those with $5 million to $10 million in assets) because plans in that size range are more likely to be working with advisors who are not retirement specialists, making a standardized request for proposal (RFP) an essential service enhancement.

The NAPA Recordkeeping Platform Assessment Template deals with three key service aspects: administration fee detail (including per-participant, asset-based, and participant and document services); plan service highlights (including data submission, reporting and testing and call center services); and investment program overview (including fund menu requirements and revenue-sharing methodology).

The NAPA Recordkeeping Platform Assessment Template is available at no charge in a PDF format on the website.

iCapital Network Deepens Hedge Fund Capabilities

iCapital Network announced multiple milestones solidifying its overall hedge fund capabilities. Since acquiring the HedgeFocus platform from Credit Suisse in early 2016, iCapital has bolstered its hedge fund menu and reinforced its strategic relationship with Fidelity Institutional in response to recent investor demand.

iCapital has expanded its strategic relationship with Fidelity Clearing & Custody Solutions – the division of Fidelity Investments that provides clearing and custody services to registered investment advisors, broker-dealers, family offices and banks. Fidelity’s intermediary clients will now have direct access to iCapital’s hedge fund offerings. This latest development builds on iCapital and Fidelity’s relationship, announced last year, which provided Fidelity’s financial intermediaries access to iCapital’s private equity fund offerings.  

iCapital’s proprietary technology is fully integrated with Fidelity’s advisor platform Wealthscape and available through Fidelity’s Alternative Investments Product Center, and provides advisors with access to investments at minimums as low as $100,000.

Since the HedgeFocus acquisition, iCapital has also concentrated on filling out its hedge fund menu with a range of managers across key categories, offering two or more managers and fund options in each category and multiple off-shore options for investors.

iCapital offers a curated selection of alternative investments, including private equity, private credit, real estate, venture capital and hedge funds, to its private network of qualified investors and advisory professionals.

Collectively, the hedge fund managers on the iCapital platform oversee more than $100 billion in assets.

—Read last week’s portfolio roundup here: BNY Mellon’s Pershing Launches No-Fee ETF Platform: Portfolio Products


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