Close Close
Sign In
Newsletters
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards
Podcast Center Video Center Webcasts Resource Center Events
About ThinkAdvisor Contact Us Advertise With Us Asset & Logo Licensing Sitemap Terms of Service Privacy Policy Copyright © 2024 ALM Global, LLC. All Rights Reserved.
ThinkAdvisor

Portfolio > Portfolio Construction

Principal Adds Tax-Advantaged ETF: Portfolio Products

By Jeff Berman

X
Your article was successfully shared with the contacts you provided.
tax form (Photo: Shutterstock)

Principal Global Investors has  introduced the Principal Spectrum Tax-Advantaged Dividend Active ETF (PQDI with a 0.60% net expense ratio) “designed to help U.S. taxpayers boost after-tax income by targeting exposure to qualified dividends,” the company said.

PQDI trades on the NYSE Arca and focuses on income from dividends of preferred securities which are eligible for beneficial tax treatment but also invests in securities not eligible for such treatment. PQDI seeks securities that, at the time of issuance, are eligible to pay dividends that qualify for reduced U.S. federal income tax rates — a “qualified dividend income” (“QDI”) — or for the deduction of qualified real estate investment trusts (“REIT”), which range up to 20%.

PQDI is managed by Spectrum Asset Management, a capital securities investment team within Principal. It is the second ETF managed by Spectrum, following the Principal Spectrum Preferred Securities Active ETF that was introduced in 2017.

BlackRock Introduces New iShares ESG ETFs

BlackRock launched two new suites of environmental, social and governance iShares ETFs that it said are designed to help investors achieve outcomes best aligned with their goals.

The iShares ESG Aware Asset Allocation ETFs include conservative, moderate, growth and aggressive allocation ETFs that track an index composed of a portfolio of underlying equity and fixed income funds with positive ESG characteristics. Each index provides a fixed allocation strategy designed to represent one of those four risk profiles for investors and each has an 0.18% net expense ratio.

These ETFs are iShares ESG Aware Conservative Allocation ETF (EAOK), iShares ESG Aware Moderate Allocation ETF (EAOM), iShares ESG Aware Growth Allocation ETF (EAOR) and iShares ESG Aware Aggressive Allocation ETF (EAOA).

The iShares ESG Advanced MSCI ETFs is the other ESG-focused suite of ETFs. It includes four  ETFs that offer exposure to indices of companies with higher ESG scores, while also applying extensive screens related to heavily debated topics including fossil fuels, palm oil, for-profit prisons and controversial weapons.

Those four ETFs are the iShares ESG Advanced MSCI USA ETF (USXF, 0.10%), iShares ESG Advanced MSCI EAFE ETF (DMXF, 0.12%), iShares ESG Advanced MSCI EM ETF (EMXF, 0.18%) and iShares ESG Advanced Total USD Bond Market ETF (EUSB, 0.12%).

BlackRock has now launched 22 new iShares ESG ETFs in all this year across the U.S., Canada and Europe, it said.

Separately, BlackRock Advisors announced that the Boards of Trustees of the BlackRock New York Municipal Income Trust II (BFY), BlackRock New York Municipal Income Quality Trust (BSE) and BlackRock New York Municipal Income Trust (BNY) have approved the reorganizations of BFY and BSE into BNY, which will continue as the surviving fund. The company said it expects the reorganizations will be completed in or before the first quarter of 2021, subject to the requisite approvals by each fund’s shareholders, the refinancing of BNY’s preferred shares and the satisfaction of customary closing conditions.

Gitterman Launches SMART UMAs Focused on Sustainability

Gitterman Wealth Management introduced the Sustainability Metrics Applied to Risk Tolerance Unified Managed Account Models that it said are designed to give clients access to boutique and emerging managers that implement climate science to security selection and portfolio construction in a UMA structure.

The SMART UMA Models include products with “robust financial metrics, sophisticated ESG capabilities and rigorous due diligence processes, and are available to outside” RIAs and retail investors, the firm said.

According to the World Economic Forum, the highest impact and highest probability global risks are mainly climate-related or will be exacerbated by climate change, Gitterman said.

The SMART UMA models feature managers who are “strategically exploring climate scenarios and their related impacts, alongside disclosing risks and opportunities,” it said. Natixis will serve as the tax overlay manager to achieve after-tax returns that may benefit from significant outperformance.

Biotech Added to ETFMG’s Thematic ETF Offerings

ETFMG’s latest ETF adds biotech to its thematic offerings for investors, the company said.

The ETFMG Treatments, Testing and Advancements ETF trades on the NYSE Arca (GERM, 0.68%) and “seeks to answer investor demand for direct exposure to the biotech companies directly engaged in the testing and treatments of infectious diseases,” according to the firm.

The methodology behind the fund concentrates on the advancements in the infectious disease subsector of biotech with targeted exposure to U.S.-listed companies that it said are “at the forefront of R&D, vaccines, therapies and testing technologies.”

GERM provides access to established providers as well as the “unsung heroes” of the biotech and life sciences market, the firm said.

The frequency and diversity of disease outbreaks like COVID-19 have increased steadily for the last 30 years, the company said, noting that, from January 2011 to January 2018, there were 38 epidemic events in the U.S. alone and there are now more than 20 combined pandemics and epidemics impacting the world. “The unfortunate emergence of the recent COVID-19 pandemic has brought mainstream emphasis to the value of the human vaccines market, expected to grow to $72.5 billion by 2024, representing a CAGR of 11.2% from 2016 to 2024,” ETFMG said.

Hartford Funds to Close, Liquidate 2 ETFs

Hartford Funds will close and liquidate two ETFs: Hartford Multifactor REIT ETF (RORE, 0.45%) and Hartford Multifactor Low Volatility US Equity ETF (LVUS, 0.19%).

In its announcement, the firm said only that its “commitment to responding to investors’ needs includes a regular review of its product lineup, which has led to a decision to liquidate” the funds.

However, a company spokeswoman told ThinkAdvisor Monday:  “Hartford Funds remains committed to offering differentiated products that add value for advisors and their clients. As part of our regular product review, we decided to streamline our ETF lineup to ensure that our products continue to align with our investor-centric philosophy.”

Aug. 7, 2020 is expected to be the last full day of trading for RORE on the NYSE Arca and for LVUS on the Cboe BZX Exchange, Hartford Funds said. The liquidation date for the funds will be on or about Aug. 14, 2020. NYSE Arca and Cboe BZX are expected to stop trading in shares of each fund after the market close Aug. 7.

Janus Henderson to Reopen Class D Shares of its Mutual Funds

Janus Henderson Investors will reopen Class D shares of its U.S. mutual funds through the firm’s Direct Business Channel, it said.

Class D Shares were closed to new investors, with certain limited exceptions, in July 2009, the company pointed out. Since then, “there have been several shifts in the marketplace and with distribution models, which have led to the firm’s decision to reopen the channel” now, it said.

The firm also announced that its Janus Henderson Direct Business Channel Referral Program will provide existing investors the ability to offer a referral to friends and family. Via the Referral Program, subsidiary Janus Services will fund the $100 initial investment for new investors that receive a referral from an existing investor, the company said. To receive the Referral Program benefit, new investors must establish and maintain an automatic investment of at least $50 per month for two years, it said.

The launch of the Janus Henderson Referral Program and the direct channel reopening are expected to go into effect July 6, the company said.

— Check out last week’s portfolio product roundup here: Franklin Templeton Adds Active ETF Offerings: Portfolio Products

Jeff Berman

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.