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Franklin Templeton Adds 3 New Fixed Income Active ETFs: Portfolio Products

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Franklin Templeton Investments introduced three new ETFs — Franklin Liberty Senior Loan ETF (FLBL)Franklin Liberty High Yield Corporate ETF (FLHY) and Franklin International Aggregate Bond ETF (FLIA) — expanding its lineup of fixed income active ETFs managed by its fixed income Group. The three ETFs are listed on the Cboe BZX exchange.

“In a persistently low-yield environment like the one we’ve been in, the need for income has intensified while advisors and clients are challenged in finding it,” said Patrick O’Connor, head of global ETFs. “As investors look to get more income out of their fixed income allocation, these new ETFs enable them to access additional fixed income sectors globally in a targeted way, as they define what they need and how they want to achieve it.”

The Franklin Liberty Senior Loan ETF seeks to provide a high level of current income with a secondary goal of preservation of capital.  It invests at least 80% of its net assets in senior loans and investments that provide exposure to senior loans issued by U.S. and non-U.S. corporate entities. The senior loans includeleveraged loans, bank loans and/or floating rate loans.

The Franklin Liberty High Yield Corporate ETF (FLHY) also seeks a high level of current income with a secondary goal of capital appreciation. It invests at least 80% of its net assets in high yield corporate debt securities and investments that provide exposure to those securities, and it can enter into certain derivative transactions, principally currency and cross currency forwards and swap agreements, including interest rate and credit default swaps.

The Franklin International Aggregate Bond ETF (FLIA) seeks to maximize total investment return, by combining interest income and capital appreciation. The fund invests at least 80% of its net assets in bonds and investments that provide exposure to bonds, predominantly fixed-and floating-rate bonds issued by governments, government agencies and governmental-related or corporate issuers located outside the U.S. The fund may also enter into various currency-related transactions involving derivative instruments, including currency and cross currency forwards and currency futures contracts.

Hartford Funds Extends ETF Rollouts with Launch of Hartford Short Duration ETF

Hartford Funds launched the Hartford Short Duration ETF (HSRT), which seeks to provide current income and long-term total return by investing in fixed income securities.

Sub-advised by Wellington Management Company LLP, HSRT will typically invest in investment grade securities, but can also invest in bank loans and non-investment grade fixed income securities. The Fund will use derivatives — such as Treasury futures and interest rate swaps — to manage its interest rate risk and duration, maintaining a dollar-weighted average duration of less than three years. HSRT’s expense ratio is 0.29%.

Xtrackers Repurposes China A-Shares ETF to Provide Access to MSCI Inclusion

DWS today announced that the Xtrackers CSI 300 China A-Shares Hedged Equity ETF (ASHX) will change its name to Xtrackers MSCI China A Inclusion Equity ETF and switch its underlying index to the MSCI China A Inclusion Index. The new index is designed to track the progressive partial inclusion of A shares in the MSCI Emerging Markets Index over time. A shares that can be accessed through the Stock Connect program.

Effective today, the gross and net expense ratio for ASHX has been permanently reduced to 0.60% from 1.35% gross and 0.70% net expense ratios, which according to DWS makes the fund the most cost-effective pure China A-shares exposure ETF in the U.S. ETF market.

The net expense ratio for Xtrackers MSCI All China Equity ETF (CN) was also reduced, to 0.50% from 0.62%, effective June 1.

Nationwide Advisory Solutions Adds Nine New Funds

Nationwide Advisory Solutions added nine new funds to Monument Advisor, its flat-fee investment-only variable annuity (IOVA).

To round out its suite of offerings from top manager American Funds, Nationwide Advisory Solutions now offers six new investment options, bringing the total to eighteen. The new additions from American Funds include, Capital Income Builder, Global Growth and Income Fund, Global Growth Fund, U.S. Government/AAA-Rated Securities Fund, International Growth and Income Fund, and Global Small Cap.

Nationwide Advisory Solutions also added Nationwide’s NVIT Nationwide Fund, which changed subadvisers in November 2017 to AQR Capital Management. The fund strategy utilizes a defensive large-cap equity style.

In addition, Nationwide Advisory Solutions now offers RIAs and fee-based advisors two funds from MFS investment Management: MFS Value and MFS Growth.

Amplify ETFs Launches Amplify Advanced Battery Metals and Materials ETF

Amplify ETFs launched a professionally managed ETF that seeks to provide exposure to Lithium, Cobalt, Nickel, Manganese and Graphite via publicly-traded stocks.

Companies in Amplify Advanced Battery Metals and Materials ETF (BATT) are principally engaged in the business of mining, exploration, production, processing or recycling of advanced battery metals and materials. BATT constituents must derive 50% or more of their revenue, or be in the top five and have at least 10% of global market share, of any advanced battery material.

Amplify believes the global battery market will experience growing demand due to the growth of robotics, electric vehicles, artificial intelligence, smart devices and clean energy technology. In addition, the constrained and geographically concentrated supply of battery metals and materials suggests positive movement in prices for these essential building blocks.

BATT will be co-managed by the Fund’s sub-advisers, Toroso Investments, LLC and Exponential ETFs.

EquBot Launches the AI-Powered International Equity ETF (AIIQ)

EquBot launched the AI Powered International Equity ETF (AIIQ), an actively managed ETF that focuses on equity securities of companies located in developed markets outside the U.S.

Securities are selected based on the results of proprietary, quantitative, AI-driven model, which runs on the Watson platform. Each day, the EquBot model ranks thousands of stocks based on the probability of each company benefiting from current economic conditions, trends and world events, and identifies between 80 and 250 companies for inclusion in the portfolio that have the greatest potential for price appreciation over the next twelve months.

The model also seeks to incorporate a volatility screen, with a goal of maintaining portfolio volatility comparable to that of the broader developed markets ex-U.S. AIIQ may invest in companies of any market capitalization, and the weight of any individual company in the underlying portfolio is capped at 10%.

EquBot’s state-of-the-art technology is driven by its proprietary algorithms. It combines fundamental and qualitative analysis while formulating new investment insights based on  massive amounts of data to build predictive financial models on more than 15,000 publicly traded companies in the U.S. and other developed markets. AIIQ has an expense ratio of 0.79%.

J.P. Morgan Launches Enhanced Digital Target Date Compass Program

J.P. Morgan Asset Management announced a major upgrade to its popular Target Date Compass tool that advisors use to help plan sponsors make informed target date fund selections.

The new Target Date Compass has easier, more intuitive navigation, deeper analytics, and greater customization.

First introduced a decade ago, Target Date Compass sets the standard for helping defined contribution plan sponsors evaluate the critical differences among target date funds. Powered by J.P. Morgan Spectrum using Morningstar data, the enhanced Target Date Compass continues to help plan sponsors determine which target date funds fit their plans’ goals.

Thousands of advisors use Target Date Compass to help their plan sponsor clients narrow the growing array of fund choices.  The program asks plan sponsors to consider important plan criteria including objectives, risk tolerance, demographics and expected participant behavior. Answers to these questions help plan decision-makers identify the Target Date Type that best matches plan goals and participant needs. This allows plan sponsors to concentrate on a group of funds that are likely to match the plan’s goals and objectives.

Read last week’s portfolio products here: RBC Gives HNW Clients Access to New Digital Alts Platform: Portfolio Products.


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