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Vanguard Changes Key Leaders in Investment Management: Portfolio Products

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Vanguard made several key appointments across its investment management division, including portfolio manager changes, as part of what it said were “ongoing efforts to build and expand the capabilities of its global team of more than 500 portfolio managers, analysts, and traders.”

The changes were made across Vanguard’s Fixed Income Group and Quantitative Equity Group, which, together with Vanguard’s Equity Index Group, oversee more than $5.2 trillion, or 89% of Vanguard’s total assets under management, it said.

Sara Devereux joined the fixed income group company from Goldman Sachs as principal and global head of rates, succeeding Ron Reardon, who retired after 18 years with Vanguard. Jeffrey Johnson is relocating to Malvern, Pennsylvania as co-head of Bond Indexing – Americas, after leading Vanguard’s Asia-Pacific Fixed Income Group in Melbourne, Australia,  and Nathan Will has assumed the role of head of municipal credit research.

Vanguard also announced portfolio manager changes to its active taxable fixed income fund lineup: Arvind Narayanan moves to Vanguard’s investment-grade credit portfolios to oversee the credit sleeves of Vanguard Core Bond Fund and Vanguard Global Credit Fund; Mauro Favini moves tothe  Vanguard Emerging Market Bond Fund; and Gemma Wright-Casparius will focus on the short-, intermediate-, and long-term Treasury funds and the Inflation Protected Securities Fund, while relinquishing her Core Bond Fund portfolio management responsibilities.

In the Quantitative Equity Group, Sharon Hill was named senior portfolio manager, head of Alpha Equity – Global & Income.

Hennessy Rebalances Cornerstone Mid Cap 30

Hennessy Funds has completed the annual rebalance of its 16-year-old Hennessy Cornerstone Mid Cap 30 Fund and kept just three companies’ stocks this time, Ryan Kelley, portfolio manager, said at a recent press briefing.

The “keepers” were Corte Madera, California-based home furnishings retailer Restoration Hardware (RH), Jacksonville, Florida-based transportation logistics services company Landstar System (LSTR) and Chicago insurance company Old Republic International (ORI), he noted.

The strategy for the fund remains the same, said Kelley, explaining: “It is a concentrated portfolio in which we invest just into 30 names, and those 30 names are all mid-cap names.” Like all the four funds that follow the Cornerstone strategy, Mid Cap 30 takes a “fundamental quantitative” approach, removing all emotional investing and focusing on what’s “worked over a long period of time,” while being transparent to investors, he said.

Three sectors are key components of the mid-cap fund: financials, information technology and consumer discretionary. Although the financials sector “lagged” the overall market in 2018, it’s made a strong comeback in 2019, with stocks up about 28% year to date, said Kelley, noting the fund includes six stocks in that sector this year (four of them insurance firms), up from just two in 2018.

Hennessy also boosted the number of IT stocks, to six this year from three last year and none in 2017, as enterprise spending drives the sector, he noted.

The largest sector exposure of the fund is again in consumer discretionary, accounting for 10 stocks, much of them focused around housing because of strength in that market. “We’re in the second-largest expansion period for homebuilding in history,” said Kelley noting the support of low interest rates in new home purchases and increased home prices.

Cornerstone Mid Cap 30 has “returned about 10% per year since inception,” said Kelley.  All the stocks in the portfolio are U.S.-based and combine “value, earnings growth and momentum together to give [investors] a good portfolio of companies,” said Kelley. Hennessy Funds has $5 billion in assets under management and nearly 250,000 shareholders across the U.S., according to the company.

Envestnet MoneyGuide Releases Four More Blocks

Envestnet MoneyGuide expanded its MyBlocks financial wellness ecosystem further, adding four new “blocks” of information: Financial Concerns, Financial Goals, Retirement Concerns and Retirement Expectations.

Financial Concerns enables clients to “self-diagnose concerns such as overspending,” losing a job or buying a home, Envestnet said. Each concern is rated on a scale of concern from low to high, which can form the basis of a discussion between advisors and clients to “identify new strategies that will give clients peace of mind to ease concerns and meet goals,” it said.

Financial Goals gives clients the chance to “explore what they want to do with their money,” such as whether they want to use it to travel, buy a new home or pay for a child’s school, Envestnet said.

Retirement Concerns enables clients to “self-diagnose concerns such as not having a paycheck anymore” and healthcare costs, while Retirement Expectations gives clients an opportunity to identify what they are looking forward to in their retirement and how important it is to their happiness, Envestnet said.

The new blocks enable everybody involved in a family’s financial planning to have input about  their own expectations and concerns regarding retirement plans and finances that can impact their lives together, the company said.

“Many times, advisors are engaging with one individual within a couple, which can lead to a plan that only takes into consideration one person’s goals,” according to Tony Leal, president of Envestnet MoneyGuide. “These new blocks are designed to not only help advisors engage the partner they typically would not have another opportunity to interact with, but also make sure the couple is aligned on their financial priorities,” he said in a statement.

Wealthspire Advisors Launches Hybrid Wealth Management Solution

Wealthspire Advisors launched Wealthspire Pathways, a hybrid wealth management solution that the NFP Corp. subsidiary said combines the firm’s traditional focus on financial planning and client service with an automated technology platform.

Wealthspire’s goal with Pathways is to “bring professional financial planning and investment management services to a broader group of clients, including those who are accustomed to using online interfaces,” it said. Clients can access a dedicated certified financial planner.

“One of the biggest differentiators between Pathways and standard ‘robo-advisor’ platforms is that clients have access to a dedicated” Certified Financial Planner, the company said, adding: “Advisors specializing in the platform will work with clients to develop a personalized financial plan based on the client’s unique situation and goals. The plan will be updated annually or when major life events occur.”

That “structure helps us maintain our high standard of care across all clients and offerings,” said Wealthspire CEO Mike LaMena, adding: “Over time, we expect many Pathways clients to transition to our more traditional service model.”

Motif Introduces Free Direct Index Portfolio

Motif launched a free direct index portfolio that uses a proprietary algorithm to track the 500 largest market cap companies.

“Until now, direct indexing adoption has been limited by high minimums — typically $250,000 or greater,” according to Hardeep Walia, Motif CEO and founder. “Unlike a mutual fund or ETF where you pay to get indirect ownership, the Motif 500 lets you own the underlying stocks in one account for free,” he said in a statement. Walia added: “Owning the underlying companies means you can tax optimize or customize to meet specific goals.”

The Motif 500 direct index portfolio complements the company’s flagship product, Motif Thematic Portfolios, it noted.

In 2017 the company launched Motif Impact Portfolios, a fully-automated investing services that it said aligns investors’ personal values with their financial goals. Last year it launched a new a new thematic portfolio focused on artificial intelligence. The company plans to launch additional services such as “tax-loss harvesting and customization, it said.

Check out last week’s portfolio product roundup here: Putnam Launches 7 SMAs: Portfolio Products.


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