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Portfolio > Portfolio Construction

RIA in a Box Adds Free Access: Portfolio Products

By Jeff Berman

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RIA in a Box added a new free level of access to its Vendor Due Diligence Platform as part of its MyRIACompliance software platform.

The platform allows RIA firms and vendors to automate documentation sharing and tracking, including documents such as email compliance, data security and cybersecurity policies. Current industry vendors available on the platform include: Advyzon, Envestnet MoneyGuide, Morningstar, Orion, Redtail, RIA in a Box, Riskalyze and Wealthbox.

Free users can automatically connect with up to five vendors on the platform. Once digitally connected with a vendor, the RIA firm gets real-time access to the vendors’ latest information security due diligence information. The RIA firm can also store vendor documentation and record the diligence process in the firm’s online compliance log that’s entirely exportable at any time for no additional charge, RIA in a Box said.

“The RIA industry is more dependent on third party vendors than ever before,” according to GJ King, RIA in a Box president. “Given the regulatory focus and how important it is for an RIA firm to perform proper third-party vendor due diligence as part of its cybersecurity program, we’ve spearheaded this new platform to streamline this important process for RIA firms and leading industry vendors,” he said in a statement.

Fidelity Joins Forces With Ethic on ESG

Fidelity Investments teamed up with RIA and asset manager Ethic to help advisory firms incorporate environmental, social and governance investment options into their businesses.

The ESG option will be made available to a limited number of firms initially and also provides a client engagement strategy that will help advisors connect with the next generation of investors, Fidelity said. The initial rollout, now underway, includes large RIAs and family offices, Fidelity spokeswoman Nicole Abbott told ThinkAdvisor.

In addition to this new ESG solution, Fidelity has already been providing its “tens of millions of individual investors access to a wide range of ESG-focused products and services, including dedicated index funds in every major asset class,” she said.

Fidelity selected Ethic for this new initiative because that firm’s “creation of values-aligned [separately managed accounts] complement Fidelity’s portfolio construction and practice management resources to help advisory firms incorporate ESG investing into their business,” she told us.

Fidelity thinks of Ethic as a “trusted tour guide to give advisors the confidence to have these conversations with their clients,” according to Bob Litle, senior vice president of Fidelity Institutional Asset Management. “We see a significant growth opportunity for advisors who incorporate an ESG investing approach because it drives more meaningful conversations with clients,” he said in a statement.

Goldman Sachs Taps BNY Mellon for European ETFs

BNY Mellon was appointed by Goldman Sachs Asset Management to deliver a suite of asset services for its new European Undertakings for the Collective Investment of Transferable Securities exchange-traded funds.

In addition to BNY’s ETF solutions supporting ETF order management, PCF production and AP servicing, BNY is also providing fund accounting, transfer agency, depository, custody, paying agent and common depository, BNY announced.

Separately, BNY said it expanded its ESG Analytics offering by integrating fixed income scoring for corporate bonds. The firm’s clients now have the ability to view ESG and United Nations Global Compact (GC) scores on equities and fixed income at the portfolio level versus relevant benchmarks over time, it said. Clients also have the ability to view the ESG and GC scores at the company-level.

Scientific Beta Adds ESG Option

Scientific Beta is now providing an ESG option for all of its indices, EDHEC-Risk Institute’s division announced.

The ESG option allows investors to use Scientific Beta’s High Factor Intensity (HFI) Multi-Beta Multi-Strategy (MBMS) indexes while “upholding ESG norms and materially reducing exposure to companies with high exposure to ESG risks,” it said.

State Street Adds 7 Rebranded SPDR ETFs to SPDR Portfolio

State Street Global Advisors added seven rebranded SPDR ETFs to its SPDR Portfolio suite. The Boston company’s asset management division introduced the SPDR Portfolio in 2017 and, since then, it’s attracted $34.4 billion in new assets to the portfolio that’s now made up of 22 low-cost ETFs and offers access to a wide variety of domestic and international equity and fixed income asset classes, according to the company.

The seven rebranded funds include five fixed income and two international equity ETFs, representing $4.4 billion in assets, the company said. All seven have new names and ticker symbols to align with the SPDR Portfolio ETF suite, and three funds have reduced net expense ratios.

The SPDR MSCI ACWI ETF (ACIM) has become the SPDR Portfolio MSCI Global Stock market ETF (SPGM) and its net expense ratio was lowered from 0.25% to 0.09%. The SPDR STOXX Europe 50 ETF (FEU) has become the SPDR Portfolio Europe ETF (SPEU) and its net expense ratio was lowered from 0.29% to 0.09%. The SPDR Bloomberg Barclays TIPS ETF (IPE) was changed to the SPDR Portfolio TIPS ETF (SPIP) was reduced from 0.15% to 0.12%.

The expense ratios of the other four were already reduced, the company noted. Those fund names changed from SPDR Bloomberg Barclays Corporate Bond ETF (CBND) to SPDR Portfolio Corporate Bond ETF (SPBO) with its expense ratio remaining 0.06%; SPDR Bloomberg Barclays Intermediate Term Treasury ETF (ITE) to SPDR Portfolio Intermediate Term Treasury ETF (SPTI) with its expense ratio remaining 0.06%; SPDR Bloomberg Barclays Mortgage Backed Bond ETF (MBG) to SPDR Portfolio Mortgage Backed Bond ETF (SPMB) with its expense ratio remaining 0.06%; and SPDR ICE BofAML Broad High Yield Bond ETF (CJNK) to SPDR Portfolio High Yield Bond ETF (SPHY) with its expense ratio remaining 0.15%.

The underlying index for the SPDR STOXX Europe 50 ETF, meanwhile, changed from the STOXX Europe 50 Index to the STOXX Europe Total Market Index.

Avantis Launches Five Low-Cost ETFs

Avantis Investors by American Century Investments introduced five low-cost, broadly diversified ETFs: Avantis International Small Cap Value ETF (AVDV), Avantis International Equity ETF (AVDE), Avantis Emerging Markets Equity ETF (AVEM), Avantis U.S. Equity ETF (AVUS) and Avantis U.S. Small Cap Value ETF (AVUV).

The new ETFs are listed on the NYSE Arca and were designed to “fit seamlessly into investors’ asset allocations,” the Kansas City, Missouri-based company said.

To benefit various types of investors, gross expense ratios for the five ETFs and soon-to-be-launched mutual funds are expected to have the same objective, the company said, noting they are 0.36% for International Small Cap Value; 0.23% for International Equity; 0.33% for Emerging Markets Equity; 0.15% for U.S. Equity and 0.25% for U.S. Small Cap Value.

Net expense ratios weren’t provided. But company spokesman Chris Doyle said: “At this time gross and net are equivalent because there are no fee waivers or reimbursements associated with the new ETFs.”

Global X Introduces Its 15th Cannabis ETF

New York-based Global X ETFs launched Cannabis ETF (POTX) on the Nasdaq stock exchange, noting it’s the 15th fund in its Thematic Growth suite of offerings.

POTX tracks the Cannabis Index and was designed to provide investors with an efficient tool to access leading companies across the cannabis industry, it said.

By tracking an index that targets companies that attribute at least 50% of their revenue, operating income or assets from the cannabis industry, POTX will provide investors with a “focused approach to investing in an emerging industry that may benefit from further legalization efforts across North America and the rest of the world,” the company said.

A total expense ratio of 0.50% will be charged to investors, making it the lowest-cost passive cannabis-focused ETF in the U.S., according to the company.

Invesco Files for New ETF, Widens BulletShares Offerings

Invesco filed an application with the Securities and Exchange Commission requesting exemptive relief to build its own non-transparent active ETF model. The Atlanta company announced separately that it expanded its BulletShares offerings to include municipal bond ETFs.

The proposed non-transparent ETF model will retain several of the characteristics that Invesco said investors “find attractive in an ETF wrapper, including an effective arbitrage mechanism, tax efficiency and intraday tradability.” If approved, the model will “maintain confidentiality of a fund’s strategy and help mitigate the risk of front-running by keeping a portion of the fund’s holdings confidential to the market,” the company said. The Invesco-affiliated broker-dealer would help authorized participants delivering or receiving an in-kind basket of securities while executing trades to realign the creation and redemption basket to the fund holdings, it said.

Meanwhile, Invesco introduced a new suite of defined maturity BulletShares ETFs with exposure to municipal debt issued by state and local governments. With BulletShares Municipal Bond ETFs, the company is looking to offer investors a passive means to access the tax-free yield of quality municipals bonds via a liquid product with a fixed date of maturity, it said.

UBS, Federated Investors Team on New High-Yield Credit Funds

UBS, Federated Investors and Hermes Investment Management teamed to launch new SDG Engagement High Yield Credit funds.

With the sustainable development goal funds, the firms are looking to achieve a “meaningful social and/or environmental impact as well as a compelling return by investing in high yield bonds and engaging with their issuers,” they said in a joint announcement. A UCITS fund, managed by Hermes, will be offered to investors globally, while a mutual fund will be available in the U.S. advised by Federated Investment, sub-advised by Hermes and distributed by Federated Securities Corp. In 2018, Federated Investors bought a majority stake in London-based Hermes Fund Managers, which operates Hermes Investment.

The funds are the first ones UBS has launched with the companies simultaneously to a global investor base, the companies said. UBS will make the funds available through the UBS platform to U.S. and non-U.S. clients (the latter initially on an exclusive basis for a 6-month period). The funds will form part of UBS’s $5 billion commitment to SDG-related impact investing, it said. They will also represent the first new strategy added to UBS’s 100% sustainable multi-asset portfolio since its launch last year.

Oranj Adds Real-Time Notifications

Oranj launched real-time notifications on its wealth management platform for advisors. The free new feature allows advisors and their clients to receive critical notifications via text and email without having to log onto the Oranj platform, the Chicago company said.

The new notifications feature was developed by Oranj’s team of four summer interns, who worked to take the project from prototype to launch. The 2019 interns were recruited from University of Illinois Urbana-Champaign and Illinois Institute of Technology and were led by a 2018 returning intern, who served as product manager and development lead, the company noted.

Meanwhile, responding to requests from advisors using the platform, Oranj also added a few other features, including an enhanced insurance dashboard, bulk tagging and new notes capabilities in client contact records, it said.

Riverfront Partners With Strategas

RiverFront Investment Group teamed with Strategas Asset Management to offer the RiverFront Strategas Policy Opportunities Portfolio on the RiverFront suite of investment solutions made available to advisors. The objective is to outperform the S&P 500 by investing in companies closely tied to public policy developments, mainly via their lobbying activity with respect to the U.S. federal government, according to the companies.

The new portfolio is made up of 50 large-cap domestic U.S. stocks that will be rebalanced quarterly using a proprietary quantitative approach to identify companies exhibiting the highest degree of “lobbying intensity” based on the aggregate amount of dollars spent on lobbying activities by that company relative to its size, RiverFront and Strategas said. Strategas is providing an investment model used to make investment selections for the portfolio.

MaxMyInterest Introduces High-Yield Checking Account

Intelligent cash management platform MaxMyInterest expanded its relationship with Radius Bank to launch Max Checking, a premium checking account providing preferred rates and features.

Max Checking combines a no-fee, high-interest checking account, powered by digital bank Radius, with MaxMyInterest’s patented intelligent cash management solution that the companies said automatically provides customers with the highest yields on FDIC-insured savings accounts.

MaxMyInterest’s platform is used by financial advisors and individual investors.

Check out last week’s portfolio product roundup here: Bloomberg Launches Its Own Equity Indexes: Portfolio Products.

Jeff Berman

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