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Portfolio > Portfolio Construction

Bloomberg Launches Its Own Equity Indexes: Portfolio Products

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Bloomberg entered the U.S. equity index market, introducing equity benchmark capabilities. The equity offering includes the Bloomberg U.S. Large Cap Index (B500) as well as growth, value and dividend indices.The benchmarks serve as the basis for the new Bloomberg SASB ESG Index family that also includes Environmental, Social and Governance (ESG)-weighted versions of the value, growth and dividend indices, it announced.

“Building equity index capabilities was a natural extension of our existing suite of fixed income, commodity and currency indices,” according to Steve Berkley, global head of Bloomberg Indices. “We are responding to requests from investors to offer comprehensive and competitive equity index solutions to help our existing index clients address their needs across asset classes,” he said in a statement.

The ESG index family includes the Bloomberg SASB ESG equity index for U.S. large cap equity and the Bloomberg SASB ESG fixed income index for investment-grade corporate bonds. R-FactorTM, an ESG scoring solution developed and made available to the market by State Street Global Advisors, is being used for the index family.

John Hancock Signs Deal with Morningstar

John Hancock Retirement signed a deal with Morningstar Investment Management to offer Morningstar’s advisor managed account services to RIA firms and their advisors for retirement plan clients, the companies announced. The offering will be piloted in the first quarter of 2020 and John Hancock said it expects to roll out the offering more broadly later in the year.

Using the Morningstar services, retirement plan participants can get personalized advice based on model portfolios aligned with the RIA firm’s investment expertise and philosophies, the companies explained. The goals-based program “considers, among many factors, each participant’s age, salary, account balance, contribution rate, gender, risk capacity, as well as tax and plan rules to help them achieve their personal retirement goals,” they said in an announcement.

“This agreement represents another step in the evolution of our advice offering,” according to Patrick Murphy, John Hancock Retirement CEO. “We’re building on a 15-year relationship with Morningstar, which started with our single proprietary managed account product,” he said in a statement, adding: “Our new offering leverages the advisor community’s expertise and ultimately enables us to help a greater number of participants reach their retirement goals.”

As of June 30, 2019, Morningstar’s managed accounts and advice services were used by almost 250,000 plans and more than 1.5 million participants, with $66.7 billion in assets under advisement and management, they noted. Central to the services is Morningstar Investment Management’s patented process that determines each participant’s investment portfolio assignment based on their risk capacity and other factors, the companies said.

Deutsche Bank Wealth Management Extends ESG Offering

Deutsche Bank Wealth Management expanded its ESG strategy as a new generation of wealthy clients increasingly ask their advisors to help them “add purpose” to their investment performance, according to the company.

For starters, the wealth management division of Deutsche Bank is adopting ESG ratings from MSCI to give clients valuable standardized information on non-financial risks and opportunities when making investment decisions.

The company is also further extending its ESG product offering across discretionary wealth management and investment advisory, launching new research, client materials and events, it said.

“This fast-growing area is of critical relevance for our clients and for the future of our business and society,” according to Fabrizio Campelli, its global head of wealth management. “ESG comes up more and more often in our regular discussions with clients…. ESG analysis, guidance and investments are rapidly becoming not just an important component of our client offering but the essential foundation for everything we do.”

Franklin Templeton Introduces New Fixed Income ETF

Franklin Templeton expanded its active fixed income ETF offerings with the addition of Franklin Liberty U.S. Core Bond ETF (FLCB), which the company said is designed to provide investors with diversified core fixed income exposure.

FLCB is an active ETF with a net expense ratio of 0.15% that “seeks total return through bottom-up fundamental bond selection and top-down sector allocation” and is listed on the NYSE Arca, it announced.

“We believe active management is critical for achieving long-term returns and managing investment risk, particularly in multi-sector investment grade fixed income,” according to Patrick O’Connor, global head of ETFs for Franklin Templeton. FLCB “can serve as a core, building block allocation in an investor’s portfolio,” he noted in a statement.

FLCB is managed by David Yuen, senior vice president and head of quantitative and multi-sector strategies; Amy Cooper, vice president and portfolio manager; Patrick Klein, senior vice president and portfolio manager, multi-sector strategies; and Tina Chou, vice president and portfolio manager with Franklin Templeton Fixed Income Group.

Vestmark Launches Trade Order Management System

The U.S. Patent and Trademark Office granted Vestmark U.S. Patent No. 10176523 for the trade order management system and methodology they developed for advisors, which is now available for all Vestmark clients via the VestmarkONE software-as-a-service (SaaS) platform,.

The patent enables financial advisors and institutions overseeing portfolios across multiple client accounts to efficiently execute trades with multiple custodians, Vestmark noted.

The mechanism also ensures regular rotations of account trades, preventing a single individual account from always trading first and obtaining the best prices; manages high volumes of trades with different counterparties in accordance with rotations, at scale; seamlessly monitors all trading activity with every counterparty; and adheres to compliance with trade rotation policies. In addition it automatically route trades to the right desks and in the correct formats that the desks require for processing them; and ensures trades are sent to where investors have fee arrangements, to leverage pricing advantages where available and applicable.

“We’re making it easier and more efficient for advisors to provide a range of sophisticated investment vehicles to their clients, and to manage and even customize the client solutions in a very scalable way,” said CEO John Lunny in a statement.

Yewno Launches New AI Platform

Yewno launched Yewno Edgea web-based Artificial Intelligence (AI)-driven research platform that it said helps financial services professionals — from institutional RIAs to retail investors — better understand financial and economic dynamics to help them “execute better and faster strategies.”

Combined with the company’s proprietary Knowledge Graph, Yewno Edge “turns information into knowledge to empower users with next-level insights into how data may impact companies and markets,” the company announced.

“In today’s economic, financial, socio political environment, understanding the complex dynamics associated with investments is critical,” according to Ruggero Gramatica, the firm’s CEO and founder. “Investors and analysts need alternative tools that can provide not only traditional fundamental data but also smart analytics that can help understanding the complexity of the financial market and generate better investment decisions,” he said in a statement.

Wilmington Trust, Nasdaq Introduce Ticker Symbols for CITs

Nasdaq and Wilmington Trust announced the first tickers for Collective Investment Trusts (CITs) on Nasdaq Fund Network (NFN), a global dissemination service with the mission of bringing greater retail investment transparency to the world’s financial markets. This solves a “major obstacle to CIT adoption: the lack of standardized ticker symbols,” they noted.

NFN and Wilmington Trust have collaborated to provide searchable tickers for more than 200 CITs, which they noted are low-cost investment vehicles similar in structure to mutual funds but available only to 401(k) and other qualified retirement plans. NFN allows investors to “easily access information on these low-cost investment funds with a standardized ticker for the first time,” they said.

“It is more important than ever for our clients to understand the various investment vehicles and make informed choices,” according to Christopher Randall, head of Retirement and Institutional Custody Services at Wilmington Trust. “As the first institution to register CITs with Nasdaq Fund Network, we are helping overcome a major challenge to widespread adoption of CITs, providing the information advisors, plan sponsors, and participants need to make fully informed decisions,” he said in a statement.

Chaikin Power Gauge ETF Rating to Be Part of PortfolioWise

The Chaikin Power Gauge ETF rating “will be the centerpiece of the upcoming product for advisors,” PortfolioWise, that Chaikin Analytics said will launch in 2020.

Describing PortfolioWise as a “cutting-edge platform that empowers advisors to construct and propose ETF-based portfolios that align with client risk,” the firm said advisors can click here to sign up for early access.

Check out last week’s portfolio product roundup here: Schwab Enhances Institutional Intelligent Portfolios: Portfolio Products.


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