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Vanguard U.S. Value Fund to Merge Into Value Index Fund: Portfolio Products

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Shareholders of the $1.1 billion Vanguard U.S. Value Fund have approved a proposal to merge it into the $96.9 billion Vanguard Value Index Fund, to become effective on or about Feb. 5.

Introduced in 1992, Vanguard Value Index Fund is a broadly diversified, large-capitalization U.S. value index portfolio. The merged fund will retain the current expense ratio of 0.05% — a decrease of 0.17% for existing Vanguard U.S. Value Fund shareholders. Vanguard Value Index Fund’s investment objective, benchmark, strategies, policies and overall portfolio management process will not change.

Shareholders have also approved a proposal to change the diversification status of five Vanguard funds from diversified to non-diversified on or about Jan. 26.  They are the Vanguard Health Care Fund, Vanguard Energy Fund, Vanguard U.S. Growth Fund, Vanguard Variable Insurance Funds – Growth Portfolio, and Vanguard Variable Insurance Funds – Real Estate Index Portfolio.

The change provides the funds’ investment advisors more flexibility to manage their respective mandates, while not materially altering the funds’ characteristics, according to Vanguard.

Separately, Vanguard has filed an initial registration statement with the Securities and Exchange Commission to launch its first active bond exchange-traded fund, the Vanguard Ultra-Short Bond ETF with an estimated 0.10% expense ratio.

The actively managed ETF is expected to launch in the second quarter and will offer a low-cost, diversified option for investors seeking income and limited price volatility, the firm says. It will invest in a diversified portfolio of high-quality and medium-quality fixed income securities, including investment-grade credit and government bonds.

With an expected average duration of about one year, the ETF’s interest rate risk sits between money market funds and short-term bond funds, offering investors a solution for anticipated cash needs in the range of 6-18 months. Vanguard Fixed Income Group will serve as investment advisor to the new ETF, expected to launch in the second quarter of 2021.

Franklin Exponential Data ETF Launches Thematic ETFs

Franklin Templeton expanded its thematic active ETF lineup with the addition of the Franklin Exponential Data ETF (XDAT), which has a 0.50% expense ratio and trades on the Cboe BZX Exchange.

XDAT seeks capital appreciation by investing in companies focused on or expected to benefit from the use of large data sets and/or the growth of data, including the creation, collection, cleaning, analyzing, storage, securing, transport, and/or the sale of data.

That includes, but is not limited to, cloud computing, data analysis, new security techniques, optical fiber, 5G and datacenter and tower infrastructure, the firm says.

Gabelli to Launch Love Our Planet & People ETF

Gabelli plans to launch the Love Our Planet & People (LOPP) ETF, which is the first of nine Precidian ActiveShares ETFs that are part of its Gabelli ETFs Trust. It is expected to list on the NYSE Arca this quarter and will have a 0.90% expense ratio.

“LOPP will emphasize the environmental aspect” of environmental, social, and governance (ESG), “placing an emphasis on investing in publicly traded companies with a focus on sustainability,” the firm says at its website. “The fund combines a research intensive process with social screens and a holistic ESG overlay to deliver returns in a socially responsive manner,” it says.

ACA Launches Global ESG Advisory Practice

ACA Compliance Group has launched a specialist global ESG advisory practice, a dedicated team it says will provide ESG advisory services to support the sustainable investment ecosystem.

ACA’s ESG practice underscores ACA’s “investment and commitment to an area that is increasingly important to ACA’s global financial services clients and their investors,” it says.

After all, it points out, “sustainability and responsible investing increasingly appear on the agendas of global political leaders, regulators, and firms alike.”

— Check out last week’s portfolio product roundup hereSchwab Launches 2 Custom-Built Variable Annuities: Portfolio Products


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