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Portfolio > Portfolio Construction

Vanguard Changes Energy Fund’s Benchmark: Portfolio Products

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Vanguard is changing the benchmark of its actively managed Vanguard Energy Fund, while boosting the net expense ratio on it by about one basis point to 0.33% for investor shares and 0.25% for admiral shares as a result of an advisory change, the company said.

“Vanguard Energy Fund will increase exposure to utilities stocks starting in late 2020 as it adapts to the energy sector’s evolution away from fossil fuels and toward renewable energy sources,” company spokeswoman Jessica Emery told ThinkAdvisor.

“We believe these changes will enhance the positioning of the Energy Fund to adapt to this evolving sector in the years ahead,” she explained.

Meanwhile, Vanguard’s Quantitative Equity Group, which has managed about 5% of the Energy Fund since 2005, “will no longer serve as an advisor to the fund,” she said.

Wellington Management, an advisor to the fund since its inception in 1984, will become the fund’s sole advisor. G. Thomas Levering, senior managing director, partner and global industry analyst for the firm, will continue as portfolio manager, according to Vanguard.

Alger to Offer Its First 2 ETFs

Fred Alger Management will launch its first two exchange-traded funds — the actively managed Alger 25 ETF (investing in 25 large-cap growth equities in the tech, health care, consumer discretionary and industrial sectors) and Alger Mid Cap 40 ETF (investing in 40 mid-cap growth equities) — on the NYSE Arca in the first quarter of 2021, the firm said.

The ETFs are not traditional actively managed ones. The firm licensed the ActiveShares nontransparent ETF strategy from Precidian Investments, enabling it to “deliver actively managed investment strategies in an ETF vehicle without disclosing holdings daily,” Alger said.

Unlike with traditional ETFs, investors will not be able to tell what assets they hold each day, Alger noted.

Wells Fargo Makes Changes to WealthBuilder Funds

The Wells Fargo Funds Board of Trustees approved enhancements to the Wells Fargo WealthBuilder Funds.

“The changes are intended to create an improved solution for existing and prospective shareholders and are planned to take effect on or around” Oct. 30, the firm said in a Product Alert.

The names of all five WealthBuilder Funds will change “to align with the Funds’ positioning as a suite of allocation funds that provide options along a spectrum of investment objectives, strategies and risks,” it said.

The Wells Fargo WealthBuilder Conservative Allocation Fund will become the Wells Fargo Spectrum Income Allocation Fund, while the Wells Fargo WealthBuilder Moderate Balanced Fund will become the Wells Fargo Spectrum Conservative Growth Fund, the Wells Fargo WealthBuilder Growth Balanced Fund will become the Wells Fargo Spectrum Moderate Growth Fund, the Wells Fargo WealthBuilder Growth Allocation Fund will become the Wells Fargo Spectrum Growth Fund, and the Wells Fargo WealthBuilder Equity Fund will become the Wells Fargo Spectrum Aggressive Growth Fund.

CornerCap Launches Fundametrics Large Cap ETF

CornerCap Investment Counsel launched the CornerCap Fundametrics Large Cap ETF (FUNL, with a 0.50% expense ratio) on the Cboe BZX Exchange.

The ETF’s actively managed strategy “evaluates companies against their custom peer groups,” CornerCap said, adding each peer group is made up of companies with “similar economic and factor style drivers.”

“By leveraging active management through a passive vehicle, one of the fund’s goals is to keep costs lower than comparable actively managed Value funds while offering tax efficiency and trading flexibility,” the company said.

— Check out last week’s portfolio product roundup here: VanEck Model Portfolios Join Envestnet Platform: Portfolio Products


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