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Dodge & Cox Launches First New Fund in 6 Years

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What You Need to Know

  • Dodge & Cox has launched the Dodge & Cox Worldwide Funds Emerging Markets Stock Fund.
  • O’Shaughnessy Asset Management has introduced a set of new defensive and models on its custom indexing platform.
  • Morningstar and Northern Trust have launched new tools to assess ESG standing of individual companies.

Dodge & Cox has launched the Dodge & Cox Worldwide Funds Emerging Markets Stock Fund, its first new fund in six years.

The actively managed fund, which trades under the DODEX symbol, invests selectively across a large, all-cap universe of emerging and frontier markets companies that the firm believes  have a favorable outlook for long-term earnings and cash flow growth and appear to be temporarily undervalued. Many of these companies are not included in the MSCI Emerging Markets Index.

Under normal circumstances, the fund will invest at least 80% of its total assets in emerging market securities, including derivatives that have economic characteristics similar to such equity securities, and it may also gain  exposure to emerging markets by investing in exchange traded funds.

The fund considers the economic and political stability of the country where the issuer is located and the protections provided to shareholders.

Its portfolio managers use the firm’s team-based approach to selecting undervalued companies, with a focus on fundamental research, individual security selection and low expenses.

“We are opening the Dodge & Cox Emerging Markets Stock Fund to provide its shareholders with access to the most compelling emerging and frontier market opportunities that we uncover as long-term, active investors,” said Charles Pohl, chairman and chief investment officer of Dodge & Cox, who noted that the firm also has has global stock and bond funds.

The fund is available in different share classes for in the EU, U.K. and U.S. , where its ticker is DOEMSUA. Its expense ratio is 0.70% at least through April 30, 2022.

O’Shaughnessy Expands Platform

O’Shaughnessy Asset Management (OSAM), has introduced a set of new defensive and dividend growth-oriented models on its custom indexing platform Canvas.

The new models include a range of options that focus on dividend growth or similar proxies and stability of sales, earnings and other key fundamentals which can be expressed across market caps and geographies.

They can be used as standalone or incorporated alongside other allocations like passive and fixed income and allow advisors to accommodate clients with greatly differing goals through one platform.

Advisors can customize the allocation for individual clients’ ESG/SRI considerations by excluding certain stocks and/or overweighting stocks of companies exhibiting positive actions. In addition, advisors can incorporate continuous tax management which targets maximum after-tax return.

“Originally advisors used Canvas to build model allocations across a spectrum of risk-tolerances or geographies and market caps,” said Patrick O’Shaughnessy, chief executive officer of OSAM “The new models help us add life-stage as a key variable for model development…. for advisors with clients looking to generate income and keep pace with inflation during retirement.“

Morningstar, Northern Trust Introduce New ESG Tools 

Morningstar has added new environmental, social, and governance (ESG) assessments for asset managers and companies to its research, investors and advisor platforms. platform Morningstar DirectS and its investor website Morningstar.com.

The Morningstar ESG Commitment Level for strategies and asset managers assesses nearly 900 funds and more than 70 asset managers and is available on  Morningstar Direct, Morningstar OfficeS, and Premium members of Morningstar.com. They will be added to the  MorningstarAdvisor Workstation and Morningstar Analyst Research Center later this month.

The Morningstar  ESG Risk Rating Assessment enables investors to easily compare and contextualize the overall ESG risk for companies across industries, and is now available for 13,000 companies in Morningstar Direct, Morningstar Office, Morningstar Advisor Workstation and for Premium members of Morningstar.com. It will also roll out to Morningstar’s equity data feeds later this month.

These ratings use the same easily recognizable and comparable globe iconography used in the Morningstar Sustainability Rating for funds, which Morningstar and Sustainalytics launched in 2016 as the market’s first fund-level sustainability rating.

The ESG Commitment Level evaluation reflects Morningstar manager research analysts’ qualitative analysis of the extent to which strategies and asset managers are incorporating ESG factors into their investment processes.

Morningstar reported assets into global sustainable funds neared $2 trillion in the first quarter of 2021, demonstrating steady growth over the past three years.

In related offering, Northern Trust Asset Management has introduced the ESG Vector Score, a measurement that assesses publicly traded companies in the context of financially relevant environmental, social and governance (ESG) related criteria that could impact their operating performance. It can be used in constructing and managing investment portfolios and stewardship activities.

The ESG Vector Score focuses on the magnitude and direction of key ESG related business issues likely to have a financial impact on companies and hence a portfolio’s performance.

The tool marries two leading sustainability disclosure standards and frameworks — the Sustainability Accounting Standards Board’s (SASB) Standards, which are industry-specific sustainability disclosure standards focused on financial materiality, and the thematic structure of the Task Force on Climate-related Financial Disclosures’ (TCFD) Recommendations.

Putnam Introduces Evaluation Tool for TDFs,CITs

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Putnam Investments has officially launched TargetDateVisualizer, which is designed to help advisors better guide plan sponsors in selecting appropriate target-date mutual funds and collective investment trusts (CITs) for inclusion in workplace savings plans, based on specific risk-tolerance preferences and investment philosophy.

“Target-date strategies offered by different asset managers may have many features in common, but no two are exactly alike,” said Steven P. McKay, head of Defined Contribution Investment Only (DCIO) at Putnam. “In some cases, the differences can be difficult to determine, making it hard to select strategies that are right for the goals of the plan and its participants.”

Interactive Brokers Launches US Spot Gold Trading

Interactive Brokers Group has launched US GOLD, enabling clients to trade U.S. spot gold in amounts as small as one ounce, side-by-side with other asset classes from a single, integrated account. Starting May 17, U.S. clients will be able to request physical delivery settlement of COMEX Gold and Silver futures directly from their accounts.

US GOLD transactions have low and transparent tiered commissions from 0.7 to 1.5 basis points of trade value with a minimum of $2.00 and are available in quantities as small as one ounce.

Interactive Brokers clients can also request some or all of their US GOLD positions in one-ounce increments for physical delivery in the United States. Clients will also be able to request physical delivery settlement of COMEX Gold, Micro Gold, Silver, and Micro Silver Futures in the form of a registered warrant or automated certificate of exchange (ACE) for each full size or Micro contract starting May 17.

Clients who meet credit requirements will be able to indicate their intention to take or make delivery directly from Trader WorkStation.www.ibkr.com/usgold.

First Trust, Others Roll Out ETFs

First Trust Advisors has launched the actively managed First Trust New York Municipal High Income ETF (FMNY), which trades on the NYSE Arca and has an expense ratio of 0.50%

The fund  applies both quantitative analysis and fundamental research to seek higher-yielding undervalued securities within the municipal market.

ETF Managers Group (ETFMG), which brought investors the first U.S. listed and world’s largest global cannabis ETF, known as MJ, has introduced the ETFMG U.S. Alternative Harvest ETF ( MJUS) on the New York Stock Exchange.

MJUS offers investors exposure to cannabis companies operating in the United States, including multi-state operators (MSOs) directly involved in the cultivation, production, marketing and distribution of cannabis or cannabis-related products. It has a 0.75% expense ratio.

MJUS  invests in cannabis companies within the Prime U.S. Alternative Harvest Index that derive at least 50% of their net revenue in the United States and in derivatives that have economic characteristics similar to such securities.

Legal cannabis sales in the U.S. exceeded $17.5 billion in 2020, representing a 46% increase over 2019’s $12.1 billion of sales and the rapid expansion of the U.S. cannabis industry is expected to continue and ultimately generate $85 billion in sales by 2030, according to ETFMG.

Simplify Asset Management  has rolled out two first-of-their-kind ETFs: The Simplify Interest Rate Hedge ETF (PFIX), which hedges against rising long-term interest rates and the  Simplify Volatility Premium ETF (SVOL)  which is a VIX income strategy with an option hedge. Both have expense ratios of 0.50%.

PFIX uses over-the-counter derivatives, typically only available to institutional investors, investing half its NAV at launch into a long-dated option on long-term interest rates. By carefully selecting option strike, time to expiry, and the underlying rate maturity, PFIX attempts to create a low-cost, powerful and highly convex position.

SVOL  buys call options on the VIX as a means of hedging against adverse spikes in equity market volatility and invests in a short volatility strategy designed to generate substantial income while minimizing volatility drag. Simplify says it is the first-ever VIX income strategy with an option hedge.

SoFi has launched SoFi Weekly Dividend ETF ( WKLY) listed on the NYSE,  the first equity ETF designed to provide a weekly dividend payment to shareholders.

WKLY joins  the SoFi Weekly Income ETF (TGIF), which launched in 2020 and was the first fixed income ETF to offer a weekly distribution to fund shareholders.

WKLY seeks to track the performance of the SoFi Sustainable Dividend Index, comprised of large- and mid-cap companies in both the U.S. and developed international markets that meet a robust set of sustainable dividend filters.

Securities selected for the index have maintained their dividend payments over the last 12 months, been forecasted to continue to pay over the next 12 months and met a number of additional screens designed to remove companies at risk of reducing their dividend payouts. The fund plans to distribute income from its investments to shareholders every Thursday.