Vanguard added to its environmental, social and governance fund offering with two new exchange traded funds.
The Vanguard ESG U.S. Stock ETF (ESGV), which has an expense ratio of 0.12%, seeks to track the FTSE U.S. All Cap Choice Index, an ESG-screened, market-cap weighted benchmark comprising large-, mid-, and small-cap U.S. stocks.
The Vanguard ESG International Stock ETF (VSGX), with an expense ratio of 0.15%, targets the market-cap weighted, ESG-screened FTSE Global All Cap ex U.S. Choice Index of large-, mid-, and small-cap stocks in developed and emerging international markets.
Both ETFs can be purchased commission-free from Vanguard and are available on other leading trading platforms.
“Vanguard’s new ETFs can serve as core components of a portfolio for individuals, institutions and advisors who wish to invest in broadly diversified, low-cost ETFs screened for certain ESG criteria,” Matthew Brancato, head of Vanguard’s Portfolio Review Group, said in a statement. “At the same time, investors should recognize that funds with ESG screens may perform differently than the broad market due to the exclusion of stocks of certain companies.”
Covering more than 80% of the U.S. equity market capitalization and nearly 70% of the international equity market capitalization, the funds exclude companies involved in the production of alcohol, tobacco, gambling, adult entertainment, weapons, fossil fuels and nuclear power. The construction methodology also excludes companies that do not meet certain diversity criteria, as well as the labor, human rights, anti-corruption, and environmental standards defined by the U.N. Global Compact Principles.
TCA by E-Trade Continues Expansion of ETF Trading Platform
TCA by E-Trade announced the expansion of its ETF Custody Advantage program, adding ETFs from WisdomTree, JPMorgan and Nationwide. The enhanced offering provides advisors who use TCA by E-Trade access to a diverse range of ETFs.
WisdomTree, the newest addition to the ETF Custody Advantage program, will give advisors on the platform 77 new investment choices. In addition, the program will add new ETFs from JPMorgan (expanding on the current JPMorgan lineup) and Nationwide — giving advisors a broader array of assets classes for the benefit of their clients.
ETFs participating in the ETF Custody Advantage program receive a custody fee offset, automatically applied to assets held in ETFs on the platform.
Vesper Capital Management Launches New ETF
Vesper Capital Management has partnered with Exchange Traded Concepts to launch a new ETF that aims to capture a unique high-turnover, high potential alpha trading strategy.
The Vesper U.S. Large Cap Short-Term Reversal Strategy ETF (UTRN) provides exposure to a select group of stocks within the S&P 500 that have the potential to benefit from a unique trading anomaly: short-term reversal.
UTRN applies a proprietary methodology, the Chow Ratio, to identify stocks that have experienced a recent sharp decline in share price but which show the greatest potential for a weekly rebound.
Based on the UTRNX index, which is calculated by S&P Dow Jones Indices, UTRN provides investors with the opportunity to capitalize on the tendency for stocks that have experienced sharp, short-term declines to quickly bounce back or rebound.
The fund, which has an expense ratio of 0.75%, will rebalance weekly and will have a concentrated portfolio of 25 stocks.
MassMutual RetireSMART Target Date Funds Introduce New Glide Paths
The MassMutual RetireSMART target date funds now offer enhanced glide paths subadvised by J.P. Morgan Asset Management Inc., and the fund family will be renamed the MassMutual RetireSMART by J.P. Morgan Target Date Funds.
The new glide paths are available within the 12 MassMutual RetireSMART TDFs, ranging from the In Retirement Fund to the 2060 Fund. The MassMutual RetireSMART Target Risk Funds, unlike the TDFs, are not being subadvised by J.P. Morgan.
As the subadvisor, J.P. Morgan will create a glide path using its long-term capital market assumptions and MassMutual participant data. In addition, J.P. Morgan will provide tactical asset allocation expertise to take advantage of short- to intermediate-term opportunities.
The MassMutual RetireSMART TDFs are available through 401(k)s and other defined contribution retirement plans offered by Massachusetts Mutual Life Insurance Co.
AXA Investment Managers Boosts Its Responsible Investment Efforts and ESG integration
AXA Investment Managers is integrating ESG analysis into all of its investment platforms.
The global, multi-asset investor announced it will now provide fund managers with access to proprietary ESG scores and key performance indicators (KPIs) in their front-office tools, as well as additional ESG data and research.
Additionally, “responsible investment” specialists are progressively being embedded into each investment team to support fund managers in incorporating ESG and impact analysis into their investment processes.
“This new step to integrate responsible investing throughout the business will ensure that ESG integration combines the need for common views on thematic engagements, voting and ESG scoring, while bolstering investment teams with detailed ESG corporate analysis,” according to Matt Christensen, global head of responsible investment at AXA IM.
A central responsible investing team will focus on thematic research, corporate governance and shareholder engagement as well as on developing quantitative solutions. Climate, human capital and health have been identified as the key thematic priorities of the centralized RI team, and specialists are appointed for each of these three themes.
ESG analytic experts are also embedded in the investment teams to enhance capabilities most relevant to the firm’s key asset classes.
Delta Data Launches Proprietary Product Manager
Delta Data, a leading provider of software and data management solutions for the mutual fund industry, launched its Proprietary Product Manager (PPM).
This new tool supports the construction, trade execution and administration of proprietary funds for trust companies, recordkeepers, insurance companies and broker-dealers.
PPM allows the creation and management of proprietary products that include collective investment trusts (CITs), target date funds, funds of funds, wrapped funds and Variable Annuities.
PPM also allows seamless management of custom securities by distributors in a single system of record alongside traditional mutual funds — eliminating manual processes involved in reconciling enterprise systems, which streamlines account management, strengthens sales pipelines and reduces risk.
—Read last week’s portfolio product roundup here: American Century, Janus Henderson, Oppenheimer Launch ETFs: Portfolio Products