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T. Rowe Price Launches Its First Impact Fund: Portfolio Products

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What You Need to Know

  • T. Rowe was already integrating ESG analysis across all its portfolios.
  • Hartford Funds launched an ETF that invests in companies positioned to benefit from an aging population.
  • Nuveen plans a high-yield muni closed-end interval fund.

T. Rowe Price, which already integrates environmental, social and governance (ESG) analysis across its portfolios, has gone a step further with its first impact fund.

The actively managed T. Rowe Price Global Impact Equity Fund invests in companies that it deems will have a positive impact on the global environment and social equity issues. The fund is aligned with the United Nations Sustainable Development goals, a global framework designed to make the world a better place, without poverty, hunger, inequality and the negative effects of climate change.

The new fund seeks “companies that are on the right side of these changes,” and that “can potentially provide excess returns over its fund’s benchmark, the MSCI All-Country World Index,” according to T. Rowe Price. It excludes investments in fossil fuels, tobacco, gaming and for-profit person companies and focuses on climate and resource impact, social equity and quality of life and sustainable innovation and productivity.

The fund is fairly concentrated, investing in about 55 to 85 global securities using an all-capitalization, high-conviction approach. Investor Class shares (TGPEX) have a net expense ratio of 0.94% and require a minimum initial investment of $2,500. Institutional I shares have a 0.79% expense ratio and minimum initial investment of $1 million.

Hari Balkrishna, who was most recently as associate portfolio manager of the firm’s Global Growth Equity Strategy, will manage the new fund and draw on the expertise of the firm’s global equity research analysts and portfolio managers, its ESG experts and proprietary Responsible Investing Indicator Model (RIIM) database, which measures more than 15,000 securities against established environmental and social parameters.

Hartford Funds Launches Longevity ETF

Hartford Funds has introduced an ETF that invests in the companies and sectors expected to benefit from the buying power of a growing aging population.

The Hartford Longevity Economy ETF (HLGE) invests in companies involved in aging in place and home modification, in maintaining social connections, in leisure and entertainment and in health care.

It is benchmarked against the Hartford Longevity Economy Index (LHLGEX), a rules-based proprietary index developed in consultation with the MIT AgeLab, and Lattice Strategies, a wholly owned subsidiary of Hartford Funds, which also values securities based on multiple factors such as valuation, momentum and quality .

The ETF “seeks to deliver a unique and diversifying shareholder experience by tapping into the under-appreciated and persistent value of evolving consumer patterns among the widening senior demographic,” said Vernon Meyer, chief investment officer of Hartford Funds. The ETF is listed on the NYSE Arca exchange and has an expense ratio of 0.44%.

Nuveen Plans a High-Yield Muni Closed End Interval Fund

Nuveen has registered with the Securities and Exchange Commission to launch the Nuveen Enhanced High Yield Municipal Bond Fund, a non-diversified, closed-end fund that is operated as an “interval fund.”

Interval funds do not trade on the secondary market like traditional closed-end funds but instead periodically offer to buy back a percentage of outstanding shares at net asset value (NAV) and are therefore less liquid than other funds. The Nuveen fund expects to offer to repurchase 7.5% of the outstanding common shares at NAV each quarter, according to the SEC filing.

The Nuveen Enhanced High Yield Municipal Bond Fund will be actively managed, target high income and capital appreciation (a secondary investment objective) and invest about 80% of assets in municipal securities, primarily those rated BBB/Baa or lower.

Class I common shares are being initially offered at $10 per share with a $100,000 minimum, which may be modified for certain eligible investors, according to the SEC filing. Class A shares require a minimum $2,500, which also can be modified for certain investments. Both share classes have a maximum sales load of 2.5%. Subsequent sales of I shares have no minimum  and those of A shares have a $100 minimum — both offered at NAV.

Cambria Converts Its Sovereign Bond ETF

The Cambria ETF Trust and its investment manager, Cambria Investment Management, have converted the Cambria Sovereign Bond ETF (SOVB) to the Cambria Global Tail Risk ETF (FAIL), which is listed on the Cboe BZX exchange.

“Fail is a natural complement to our U.S.-focused Cambria Tail Risk ETF and provides an alternative to traditional inverse funds in hedging ex-U.S. equity market risk,” said fund manager Meb Faber in a statement. Cambria expects the fund, which is designed to be a hedge against market declines and rising volatility, will produce negative returns in most years when markets are rising and volatility is declining.

The ETF uses a quantitative approach to actively manage a portfolio of out-of-the-money put options on broad ex-U.S. stock market indexes and has the potential to buy more puts when volatility is low and fewer puts when volatility is high. The majority of its assets will be invested in intermediate term U.S. Treasurys and TIPS and short and intermediate term ex-U.S. sovereignty bonds, while some assets will be invested in a basket of long put option premiums. The ETF has an expense ratio of 0.59%.

Invesco Changes Index for Its Financial Preferred ETF

Invesco announced it will change the the underlying indexes of the Invesco Financial Preferred ETF (PGF) and the Invesco Variable Rate Preferred ETF (VRP) from the Wells Fargo Hybrid and Preferred Securities Finance Index to the ICE Exchange-Listed Fixed Rate Financial Preferred Securities Index. The changes are expected to take effect at the close of trading on June 30.

Check out last week’s portfolio product roundup here: This ETF Has FOMO in Mind

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