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March 30, 2020 at 12:00 PM
Here’s a smattering of new portfolio models available:
New ESG ETFs
Blackrock’s iShares plans to introduce three ETFs that exclude fossil fuels as part of its Advanced-branded product line for index-based ETFs that also screens out for-profit prisons, controversial weapons manufacturers, palm oil producers and companies with high controversy scores.
It rebranded its Sustainable Core ETFs as Aware funds, which include only companies with favorable environmental, social and governance characteristics but offer a similar risk and return profile to broad market indexes.
The Aware product line was originally introduced in March 2018 with several equity and fixed income ESG ETFs based on indexes from MSCI, which is also the index provider for the Advanced product line. In a few weeks, those indexes for the Aware-branded ETFs will add screens that exclude companies collecting revenues from thermal coal and oil sands.
State Street, which has several index ESG ETFs, has filed an application with the Securities and Exchange Commission to trade its first actively managed ESG ETF.
The SPDR SSGA Responsible Reserves ESG ETF will invest in short-term fixed income securities including Treasuries, mortgage pass-throughs and corporate bonds and screen out most issuers that are involved in or derive revenue from extreme event controversies, controversial weapons, civilian firearms, thermal coal extraction, tobacco and UN Global Compact (sustainability principles) violations.
Issuers in the financial services sector are excluded from this initial screening process but could be screened out under other ESG criteria.
New Model Portfolios
WisdomTree recently launched two multi-asset, open architecture model portfolios designed to challenge the traditional 60/40 portfolio approach. The new Siegel-WisdomTree Global Equity Model Portfolio and Siegel-WisdomTree Longevity Model Portfolio were developed in a collaboration between the firm and Jeremy Siegel, its senior investment strategy advisor, professor of finance at U Penn’s Wharton School and author of “Stocks for the Long Run.”
The new portfolio products should help advisors “deliver a solution [so] that their clients could generate income in retirement, [and] also manage their longevity risk because people are living longer and will need their assets … for longer periods of time than they have in the past,” said Tom Skrobe, WisdomTree head of product solutions.
The portfolios are “heavily allocated to equities … in seeking to mitigate the longevity short-fall risk,” and feature an all-exchange-traded fund portfolio structure that WisdomTree said helps to “optimize tax-efficiency.”
Although the Longevity Model Portfolio is strategic in nature, the firm said it also “reflects tactical tilts based on market conditions. It is “not a static model,” Siegel said. “If one asset class suddenly does not look favorable for one reason or another, we will reduce that asset allocation.”
New Alts
TD Asset Management’s latest alternative investment solution is the TD Greystone Global Real Estate Fund. The new fund joins the firm’s comprehensive alternative suite that includes real estate, commercial mortgages and global infrastructure.
The fund’s investment objective is to “seek strong long-term, risk-adjusted returns by investing in a diversified portfolio of direct and indirect global real estate investments,” according to the company. The fund has exposure to over 500 properties located in about 15 countries, it said.
