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Portfolio > Portfolio Construction

FTSE Russell Launches Indexes Focusing on Women on Boards: Portfolio Products

By Emily Zulz

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FTSE Russell announced the creation of the FTSE Women on Boards Leadership Index Series, which increases exposure to companies based on the strength of their gender diversity leadership at the board level in addition to how well they manage their wider social impact.

This is achieved by adopting a factor based approach, tilting stocks to overweight or underweight depending on their gender diversity at board level and social impact score.

The initial indexes created within the series are the FTSE All-Share Women on Boards Leadership Index and the Russell 1000 Women on Boards Leadership Index. . These initial indexes are based on the FTSE UK All-Share® and Russell 1000®, incorporating a universe of almost 900 companies and can be used by market participants to increase their exposure towards companies demonstrating leadership in this space.

The constituent weightings in the underlying indexes are adjusted based on two measures: the “Gender Diversity Adjustment” and the “Social Impact Adjustment.”

The Gender Diversity Adjustment is a ratio of female board members to total number of board members in excess of the ICB Industry average. The Social Impact Adjustment is based on the Social Pillar score (out of five) as calculated in FTSE Russell’s ESG Ratings data model.

According to Mark Makepeace, CEO of FTSE Russell, “By using a factor-based methodology, we can adopt a positive approach highlighting leadership, promoting awareness and improving inclusive environments at all levels”.

Orion Launches Direct-Indexing Service

Orion Advisor Services announced that its direct-indexing tool – Advisor Strategy and Tax Return Optimization (ASTRO) – will become available to all financial advisors on the Orion platform on March 1.

With ASTRO, advisors can create customized, separately managed account (SMA) portfolios for all of their clients, faster and with less expense than ever.

The new tool will allow advisors to build tax-efficient non-qualified accounts, replicate indexes with customized tilts, incorporate legacy stock positions into model portfolios, accommodate environmental, social, and governance (ESG) requests, and receive notifications when an account is out of tolerance, all with built in automated tax-loss harvesting.

ASTRO’s intuitive interface and proposal capabilities are extended to advisors via Orion’s Insight App, making this capability accessible through CRM integration partners Salesforce and Redtail.

ASTRO also lets advisors view the risk and diversification characteristics of the optimized portfolio relative to the advisor’s benchmark replication portfolio.

AssetMark Launches J.P. Morgan Blended Active/Passive Strategy 

AssetMark, Inc. launched the J.P. Morgan Global Flexible strategy, which is the only core market global solution on AssetMark’s platform to offer broad-based market exposure through a combined active and passive approach.

The new strategy is currently only available on AssetMark’s platform. It features a blend of J.P. Morgan institutional-share class mutual funds and ETFs that offers advisors “greater flexibility to capitalize on immediate opportunities and adjust portfolio allocations, while managing risk more efficiently at a lower all-in cost,” according to AssetMark.

The J.P. Morgan Global Flexible strategy brings actively-managed mutual funds together with “strategic beta” ETFs.

Advisors can choose from six Global Flexible Model Portfolios within the solution, each with a unique growth objective ranging from conservative to aggressive. All portfolios include the option to adjust the risk and return potential based on the current investing environment, as well as clients’ specific financial objectives and life goals.

Grameen America Enters Impact Investing Space With Social Business Fund

Grameen America, a microfinance organization, has expanded its investor base through impact investing after closing out its first Social Business Fund, which included both new and existing investors.

Previously, Grameen America had been funded largely by traditional philanthropy and concessionary capital from foundations, charitable organizations, individual investors, and commercial lenders.

The organization’s adoption of impact investing as an additional means of funding comes at a time when impact investing—defined by the Global Impact Investing Network as “investments made into companies, organizations, and funds with the intention to generate social and environmental impact alongside a financial return”—is on the rise. It is estimated that impact investing is already a $114 billion sector, with 40% of funds originating in the U.S. and 58% from the for-profit asset management world.

As an initial endeavor, Grameen America launched its Social Business Fund in the fall of 2017 to support its microloan portfolio growth, and has seen significant success since closing out the fund. The fund is structured with nominal annual interest payments, a 20% first loss guarantee, and return of principal to investors targeted after five years.

After the successful launch of its first Social Business Fund, Grameen America plans to raise $75 million in an additional Impact fund next year, which will allow the organization to get to 100% sustainability within the next three years and to disburse $2 billion in loans to low-income women within the next five years.

Innovation Shares NextGen Protocol ETF To Begin Trading

Innovation Shares launched the Innovation Shares NextGen Protocol ETF (KOIN), which uses artificial intelligence to identify and invest in blockchain innovators and adopters.

The index underlying KOIN was constructed utilizing a natural language processing algorithm that screens for global stocks that are believed to have a current or future economic interest in blockchain technology. By harnessing the power of textual analysis and artificial intelligence, companies are uncovered that might otherwise be overlooked by traditional analytical research.

Exchange Traded Concepts will serve as the advisor for KOIN.

Mackenzie Investments Launches 12 New ETFs Based on Solactive Benchmarks

Mackenzie Investments announced the launch of 12 ETFs, all of which will be tracking different Solactive benchmark indices.

On the equity side, the underlying Solactive indices give access to diversified baskets of Canadian, U.S., and developed markets stocks, while on the fixed-income side, they provide exposure to Canadian bonds, U.S. TIPS, and USD-denominated corporate bonds.

Here’s a full list of the ETFs and their underlying indices.

  • Mackenzie Canadian Equity Index ETF, which tracks the Solactive Canada Broad Market Index
  • Mackenzie Canadian Large Cap Equity Index ETF, which tracks the Solactive Canada Large Cap Index
  • Mackenzie US Large Cap Equity Index ETF, which tracks the Solactive US Large Cap Index
  • Mackenzie International Equity Index ETF, which tracks the Solactive GBS Developed Markets ex North America Large & Mid Cap Index
  • Mackenzie US Large Cap Equity Index ETF (CAD-Hedged), which tracks the Solactive US Large Cap Hedged to CAD Index
  • Mackenzie International Equity Index ETF (CAD-Hedged), which tracks the Solactive GBS Developed Markets exNorth America Large & Mid Cap Hedged to CAD Index
  • Mackenzie Canadian Aggregate Bond Index ETF, which tracks the Solactive Canadian Select Universe Bond Index
  • Mackenzie Canadian Short-Term Bond Index ETF, which tracks the Solactive Canadian Select Short Term Bond Index
  • Mackenzie Canadian All Corporate Bond Index ETF, which tracks the Solactive Canadian Select Corporate Bond Index
  • Mackenzie US High Yield Bond Index ETF (CAD-Hedged), which tracks the Solactive USD High Yield Corporates Total Market Hedged to CAD Index
  • Mackenzie US Investment Grade Corporate Bond Index ETF (CAD-Hedged), which tracks the Solactive Select USD Investment Grade Corporate Hedged to CAD Index
  • Mackenzie US TIPS Index ETF (CAD-Hedged), which tracks the Solactive US Treasury Inflation-Linked Bond Hedged to CAD Index

Transamerica Adjusts Its Retirement Income Max Living Benefit

Transamerica has made enhancements to the Transamerica Retirement Income Max living benefit rider available with most Transamerica variable annuities.

Changes to the optional living benefit include increasing the compounding growth rate to 7.2%, presenting the opportunity to double the withdrawal base in 10 living benefit years, if no withdrawals are taken during that time. The withdrawal base does not establish or guarantee policy value, surrender value, minimum death benefit, or return for an investment option.

Transamerica Retirement Income Max is a living benefit available for new Transamerica variable annuity customers that can guarantee investors a steady, reliable income stream for life for a fee of 1.35% annually.

—Related on ThinkAdvisor: STOXX Launches AI Index Based On AI Algorithm: Portfolio Products

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