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Portfolio > Portfolio Construction

Vanguard Expands Active Offerings: Portfolio Products

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Vanguard expanded its actively managed offerings with the new Vanguard International Core Stock Fund (VWICX), managed by Wellington Management.

VWICX is “designed to be a core holding, offering an active portfolio of developed and emerging market equities that is designed to outperform across regions, styles, and sectors,” Vanguard explained.

The fund is being offered in Admiral Shares, with an estimated net expense ratio of 0.35%, and Investor Shares, with an estimated net expense ratio of 0.45%, both “considerably lower than the asset-weighted average expense ratio of 0.75% for the industry’s large-blend fund category,” Vanguard said, citing Morningstar data. The minimum is $3,000 for Investor Shares and $50,000 for Admiral Shares.

Vanguard now has an 70 actively managed mutual funds and exchange-traded funds, including three active offerings it introduced over the past year: Vanguard Global ESG Select Stock Fund, Vanguard Commodity Strategy Fund, and Vanguard Global Credit Bond Fund.

 Schwab to Offer 3 New Fixed Income ETFs

Charles Schwab Investment Management will start trading three new fixed income ETFs Oct. 10, it said.

The new ETFs are the  Schwab 1-5 Year Corporate Bond ETF (SCHJ), Schwab 5-10 Year Corporate Bond ETF (SCHI) and Schwab Long-Term U.S. Treasury ETF (SCHQ). Each  has a 0.06% net expense ratio, which Schwab said makes them “among the least expensive in their respective categories.”

The new ETFs almost double Schwab’s bond ETF offerings, from four to seven, and increases the total number of Schwab ETFs to 25. Since launching its first ETF in 2009, Schwab has risen to become the No. 5 provider with $151 billion in ETF assets, it said, citing Strategic Insight data.

Betterment Enhances Model Portfolios for Advisors

Advisors using the Betterment for Advisors platform can now customize the name of the model portfolios it uses from the platform, called Flexible Portfolios, and adjust the weights of the 17 available asset classes for all clients at once.

Previously advisors only had the ability to adjust asset weightings of  model portfolios on an individual client basis.

Bloomberg BSKT Service Picked by USB for ETFs

UBS Asset Management selected Bloomberg’s Basket service (BSKT) to enhance ETF portfolio management, the companies said.

UBS-AM is the first ETF issuer to use BSKT’s enhanced standard basket functionality, which enables authorized participants to seamlessly use Bloomberg data and analytics to deliver baskets of bonds to ETFs for creation and redemption of fund shares, the companies said.

Using BSKT, UBS-AM can scale its fixed income ETF business, consolidate interactions into a single interface and manage interactions on BSKT’s electronic workflows, they said. Adopting BSKT also provides UBS-AM with customization capabilities on standard orders and more flexibility for clients and brokers, according to the companies.

BSKT is part of Bloomberg’s comprehensive ETF suite of products that support the full ETF lifecycle, and are used by investors, issuers and liquidity providers.

Nasdaq Dorsey Wright, IndexIQ Collaborate on Alternative ETF

IndexIQ joined forces with Richmond, Virginia-based RIA Nasdaq Dorsey Wright to launch the IQ Alternative Allocation Model, the first liquid alternative model on the ETF platform of New York Life Investments division IndexIQ.

The IQ Alternative Allocation Model is designed to give advisors an “absolute return strategy built around” IndexIQ’s suite of liquid alternative ETFs and is  available to financial advisors and RIAs who subscribe to Nasdaq Dorsey Wright’s platform. No overlay fee will be assessed, the companies said.

The model rebalances monthly and is  comprised of two equal weights from the IndexIQ suite that includes: IQ Merger Arbitrage ETF (MNA), IQ Hedge Long/Short ETF (QLS), IQ Hedge Event-Driven Tracker ETF (QED), IQ Hedge Market Neutral Tracker ETF (QMN), IQ Hedge Macro Tracker ETF (MCRO) and IQ Real Return ETF (CPI).

The net expense ratios on four of the funds included in the model—QLS, QED, MCRO and QMN—were recently reduced by 35 basis points via a management fee waiver until Aug. 31, 2020,  and are now 0.67% for QLS and QMN, 0.78% for QED and 0.69% for MCRO. Net expense ratios for the other two ETFs remain 0.78% for MNA and 0.79% for QAI, according to the company’s website.

JP Morgan Asset Management to Liquidate 2 Funds

JP Morgan Asset Management is liquidating two $1 billion-plus funds: The $1.1 billion JP Morgan Emerging Economies fund and $1.6 billion JP Morgan Intrepid America fund, it said.

“A number of factors were taken into consideration with respect to the decision to liquidate the funds, with the primary drivers being asset outflows, and potential negative tax consequences to remaining shareholders,” a company spokesman said, adding:  “It is management’s view that liquidation at this time is in the best interest of each fund’s shareholders.”

John Hancock Spectrum Income Fund to be Liquidated

John Hancock Investments is liquidating its $167.72 million John Hancock Spectrum Income Fund, it said in an SEC filing.

“The Board determined that continuation of the fund is not in the best interests of the fund or its shareholders as a result of factors or events adversely affecting the fund’s ability to conduct its business and operations in an economically viable manner,” according to the filing. John Hancock declined to elaborate.

The fund, which has been managed by Charles M. Shriver, a vice president and portfolio manager at T. Rowe Price, is closed to new investments and was expected to liquidate on or about Oct. 11, John Hancock said at its website.

Oranj Creates Client Success Team to Offer White Glove Service

Oranj formed a Client Success Team that it said is providing white glove service and supports ease-of-adoption for financial advisors using its wealth management platform.

The new support team provides customized, hands-on onboarding to assist clients fast and efficiently get them set up on the platform and maximize their use of the free software, the Chicago company said. The team continues to work closely with the advisor to ensure a good client experience, according to Oranj.

The company has received strong initial feedback to the four-member Client Success Team, which includes technical support, client service and relationship management professionals with “extensive” financial services industry and RIA experience, it said. The team’s services are free, as is use of the Oranj software, it noted.

USA Mutuals Vice Fund Gets New Name 

USA Mutuals Advisors changed the name of its USA Mutuals Vice Fund to the USA Mutuals Vitium Global Fund, it said in an SEC filing.

Explaining the new name in a separate announcement, the company noted that Vitium, the Latin word for vice, is “a nod to the ancient and enduring features of the industries we focus on: global beverages, defense, casino gaming and tobacco.” The new name is also “reflective of the global nature of these businesses, and at least 40% of the portfolio will be invested outside the U.S. to capitalize on opportunities around the world,” it said.

The VICEX ticker symbol remains the same. But a new portfolio management team was named that includes investment management veterans Charles Norton and Jeff Helfrich. Norton previously served as portfolio manager of the fund from 2005-2010, the company noted.

Mesirow Touts Third Mutual Fund

Mesirow Financial launched its third mutual fund, the Mesirow Financial Enhanced Core Plus Fund.

It’s trading under the symbols MFBIX for institutional class investors with a net expense ratio of 0.54% and MFBVX for individual investors with a net expense ratio of 0.79%, according to the firm’s website.

The new fund is led by the Chicago firm’s Core Fixed Income team and will “leverage the expertise from two of Mesirow’s other institutionally focused investment and alternative strategies – Currency Alpha and High Yield Fixed Income – to offer investors a differentiated strategy,” Mesirow said.

“In today’s low-yield environment, investors are re-thinking fixed income allocations and searching for ways to achieve sufficient income and manage interest rate risk,” said Peter Hegel, head of the Core Fixed Income team, in a statement. “By incorporating high yield and active currency, the Enhanced Core Plus Fund introduces asset classes that have low or negative correlations to major equity and fixed income asset classes, while also offering investors the potential for higher yield,” he said.

RIA in a Box Teams with Riskalyze on Client Suitability Tool

RIA in a Box expanded its partnership with fintech firm Riskalyze to launch the Client Suitability Tool as an expansion of the MyRIACompliance software platform.

The new tool augments recurring Compliance Calendar reminders to prompt assessment of client suitability and performance review, providing a “more seamless experience for advisors and firms to conduct, track, and document the client suitability and portfolio review process enabled by the two platforms,” the companies said.

Upon opening the MyRIACompliance dashboard, advisors “can easily identify if a client has been assigned” a Riskalyze “Risk Number” and see if their portfolio is in alignment, the companies said. Advisors are prompted when action is needed to activate the Riskalyze integration, secure a client’s Risk Number or review a client portfolio to be in alignment with a client’s risk tolerance, they said. Riskalyze announced several other new features and enhancements to its platform one day later, at the Fearless Investing Summit in Boston.

Check out last week’s portfolio product roundup here: RIA in a Box Adds Free Access: Portfolio Products.


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