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Morgan Stanley Adds Racial Equity Investing Tool Kit: Portfolio Products

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What You Need to Know

  • Morgan Stanley's Investing with Impact Platform, which launched in 2012, has more than $60 billion in client assets.
  • Also, BlackRock, ProShares, WisdomTree, Matthew Tuttle and SonicShares launched new ETFs.
  • Betterment for Advisors has a new tool, Co-pilot, which offers several touchpoints for client engagement.

Morgan Stanley Wealth Management has launched a Racial Equity Investing Tool Kit as part of its Investing with Impact Platform to help investors who want to advance the goals of racial equity and social justice.

The Investing with Impact Platform, which launched in 2012 and has more than $60 billion in client assets, has highlighted for advisors and clients investment strategies that are at least 50% women and/or minority-owned since 2015. The Racial Equity Investing Tool Kit includes a proprietary investment framework that identifies ways to mitigate risk and pursue opportunities across a number of investment strategies, including:

  • Strategies at asset management firms owned by, or with significant representation of, racial or ethnic minorities
  • Strategies that invest in managers and companies seeking to alleviate social disparities, such as providing access to capital, affordable housing & community services, criminal justice reform, economic inclusion and education
  • Strategies that incorporate a range of environmental, social and governance criteria, including racial equity criteria focused on policies supportive of attracting and retaining talented diverse employees
  • Strategies that minimize or avoid exposure to companies, sectors or geographies with lagging racial equity records

Clients working with a financial advisor can also utilize Morgan Stanley Impact Quotient (Morgan Stanley IQ) to formalize their impact goals and then evaluate their portfolio on more than 100 social and environmental impact preferences.

BlackRock Adds Investment-Grade Corporate Bond ETF

BlackRock has launched the iShares BBB Rated Corporate Bond ETF (LQDB), which invests in the lowest overall credit category of the investment-grade market. The ETF is BlackRock’s 107th fixed income ETF; these funds total over $470 billion in assets.

The market-cap weighted diversified ETF tracks the iBoxx USD (U.S. dollar) Liquid Investment Grade BBB 0+ index and has a 0.14% expense ratio.

Steve Laipply, U.S. Head of iShares Fixed Income ETFs, says the number of outstanding BBB-rated U.S. corporate bonds has more than tripled over the past 12 years and new issuance continues to be met with strong demand.

ProShares Launches a Concentrated Nasdaq-100 Equity ETF

ProShares has launched the ProShares Nasdaq-100 Dorsey Wright Momentum ETF (QQQA), which focuses on select Nasdaq-100 stocks identified as having the greatest potential to outperform.

The ETF consists of the 21 stocks in the Nasdaq-100 Dorsey Wright Momentum Index with the highest price momentum as determined by Dorsey Wright based on its proprietary “Relative Strength” approach. The stocks are equally weighted, though their weights may fluctuate between reconstitution dates for the index.

The index is reconstituted every January, April, July and October. Operating expenses for the ETF are 0.58%.

WisdomTree Introduces 2 New Core ETFs

WisdomTree has introduced two core ETFs: the WisdomTree International Efficient Core Fund (NTSI), Emerging Markets Efficient Core Fund (NTSE) on the NYSE, with expense ratios of 0.26% and 0.32% respectively.

In addition, the firm has renamed the the WisdomTree 90/60 U.S. Balanced Fund as the WisdomTree U.S. Efficient Core Fund (NTSX), which combines an allocation of 90% equities and 10% short-term fixed income with a 60% Treasury futures overlay to help boost capital efficiency and reduce volatility. The ETF has a 0.20% expense ratio.

Two New SPAC-Associated ETFs Are Launched

Two new ETFs have started trading on the New York Stock Exchange which offer “pure play” exposure to a basket of stocks that have gone public via a merger with a special purpose acquisition company (SPAC). These companies are known as de-SPACs.

The De-SPAC ETF (DSPC) ETF tracks the performance of the De-SPAC Index (DESPACTR on Bloomberg), an equally weighted portfolio of 25 of the largest de-SPACs on a rolling 12-month basis that is rebalanced monthly.

The Short De-SPAC ETF (SOGU) is meant to provide the inverse of the same index for a single day.

“Our conversations with investors brought us to the conclusion that there was an unmet need for a true de-SPAC exposure, both on the long and short side,” Matthew Tuttle, who previously launched the SPAC and New Issue ETF (SPCX), said in a statement.

DSPC has an initial expense ratio of 0.75% and SOGU has an expense ratio of 0.95%. Both fees reflect fee waivers that are effective until at least May 31, 2022.

Betterment for Advisors Has a New Tool for Serving Clients

Betterment for Advisors has introduced a new tool that helps advisors view their entire client base in one place and identify opportunities to better engage with clients.

The feature, known as Co-pilot, initially offers:

  • Pending Invites, which allows advisors to revive expired platform invites and nudge clients to accept them, or deactivate invite links that are no longer needed
  • Account Approvals, which lets advisors remind clients to approve accounts they’ve opened for them, rather than manually reaching out either via phone or email
  • Missing Beneficiaries: A reminder to clients to designate beneficiaries on their accounts ACATs Transfers, which let advisors monitor pending and failed transfers so they can can follow up as needed

Betterment said the next wave of touchpoint opportunities will focus on higher order reminders and tasks such as opportunities for clients to max out their IRAs and surfacing RMDs for clients.

SonicShares Introduces a Travel ETF

SonicShares has debuted the SonicShare Airlines, Hotels, Cruise Lines ETF (TRYP), which tracks the Solactive Index with the same name, on the NYSE Arca.

“Prior to the pandemic, global travel and tourism enjoyed unprecedented annual growth as travelers across the globe recognized the value of experiences over the consumption of goods,” said Paul Somma, the Founder of SonicShares, in a statement. “As the pandemic recedes, travelers the world over appear eager to get back on the road, and investors can participate in this potential travel rebound with TRYP.”

The ETF has a 0.75% expense ratio.


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