Investment Product and Service Launches

Art by Jackson Epstein

Eaton Vance Changes Investment Objectives and Policies of Funds

The Board of Trustees of Eaton Vance Municipal Bond Fund (EIM), Eaton Vance California Municipal Bond Fund (EVM) and Eaton Vance New York Municipal Bond Fund (ENX) has approved changes to the funds’ investment objectives and investment policies. The approval will permit each fund to invest up to 20% of its net assets in municipal obligations rated below investment grade and will allow each fund to invest up to 20% of its net assets in municipal obligations. The interest may be subject to the alternative minimum tax (AMT and AMT bonds), and each of the foregoing changes will be effective immediately. 

Investment objectives have been revised to eliminate references to the AMT, however, each fund will continue to invest at least 80% of its net assets in municipal obligations which are exempt from the AMT.

The revised objective of the EIM fund is to provide current income exempt from federal income. The EVM fund is said to deliver current income exempt from federal income tax and California personal income tax, while the ENX fund will provide current income exempt from federal income tax and New York City personal income tax.

Pursuant to its revised investment policies, each fund may invest up to 20% of its net assets in municipal obligations rated BBB/Baa or below (or unrated obligations deemed by the fund’s adviser, Eaton Vance Management, to be of equivalent quality), provided that not more than 15% of its net assets may be invested in municipal obligations rated below B (or unrated obligations deemed by Eaton Vance to be of equivalent quality) and may invest up to 20% of its net assets in AMT bonds. Each fund’s investment policy to seek at all times to avoid investments in AMT bonds has been eliminated.

Each fund’s policy is to invest at least 80% of its net assets in municipal obligations, the interest on which is exempt from federal income tax, including AMT, and for EVM and ENX the state and/or local taxes noted above, and that are rated A or better is unchanged.

Additional information about the changes to each Fund’s investment objective and investment policies is available online at funds.eatonvance.com.

Transamerica Launches Fifth Managed Risk ETF

Transamerica has launched the DeltaShares S&P EM 100 and Managed Risk exchange-traded fund (ETF), the fifth DeltaShares strategic beta ETF. All five funds currently trade on the NYSE.

The suite of DeltaShares ETFs was expanded in March to include the S&P EM 100 Managed Risk 2.0 Index. DeltaShares Managed Risk ETFs are positioned in the marketplace as the first and only ETFs that seek to track the S&P Managed Risk 2.0 Index Series, allowing investors to participate in the performance of a particular asset class, while aiming to reduce volatility.

Milliman Financial Risk Management LLC is sub-adviser of the funds. 

The suite of DeltaShares strategic beta ETFs includes: DeltaShares S&P 500 Managed Risk ETF; DeltaShares S&P 400 Managed Risk ETF; DeltaShares S&P 600 Managed Risk ETF; DeltaShares S&P International Managed Risk ETF; and DeltaShares S&P EM 100 & Managed Risk ETF.

HB&T and Nottingham Advisors Launch ESG CIFs

Hand Benefits & Trust (HB&T) has announced the launch of two new collective investment funds (CIFs) in collaboration with Nottingham Advisors.

The Nottingham Advisors ESG Global All Asset and environment, social and governance (ESG) Global Balanced Funds are dedicated to environmental, social and governance strategies. They bring together best-in-class managers specializing in ESG investing through a highly diversified portfolio of mutual funds, exchange traded funds (ETFs) and individual bonds. With its global scope, these new CIFs can be a total portfolio solution for investors.

Created by the Hand Composite Employee Benefit Trust and sponsored by Hand Benefits & Trust, a BPAS company, the CIF will enable Nottingham to service a wide range of institutional investors, especially in the defined contribution (DC) market where plan sponsors are seeking compliant and more cost effective investment options.

“It’s broadly recognized that there’s a growing demand among 401(k) participants for ESG investment options. Our funds satisfy that demand in a way that’s simple for plan sponsors and advisers to implement; a single line-item solution,” says Nottingham Advisors Chief Investment Officer, Larry Whistler, CFA. “ESG investing has become increasingly popular as more people want to invest in ways that align with their values. There’s also growing evidence that companies ranked highly by ESG metrics can have higher returns on equity, lower risk factors, and lower volatility.”

“As trustee, administrator, and transfer agent, we are looking forward to working with the Nottingham Advisors team,” adds Stephen Hand, HB&T President. “CIFs generally provide for lower expense ratios, flexibility with underlying securities, and simplified 404(a)(5) compliance, which will make it easier for Nottingham Advisor clients to achieve their retirement goals.”

The Nottingham Advisors ESG Global All Asset and ESG Global Balanced Funds CIFs launched on April 1, and will be accessible to eligible retirement plans through most recordkeeping platforms.

Empower Adds American Funds Retirement Series to DRM Program

Empower has designed an offering within its Dynamic Retirement Manager (DRM) program that integrates the American Funds Target Date Retirement Series.

Empower’s DRM is designed to apply existing retirement investing regulations to automatically transition a plan participant’s retirement assets from a professionally managed investment option, such as a target-date fund (TDF), to a managed account, which offers a more personalized investing experience.

In this offering, plan sponsors start with a target-date series in American Funds, a family of mutual funds from Capital Group. When the time is right for participants, their savings will transition into a customized managed account solution, managed by Advised Assets Group, LLC (AAG), a registered investment adviser, using many of the same investments offered by American Funds.

“As employees approach retirement, they each have unique circumstances. By transitioning into a managed account they will get the personalized attention they need at the time they need it,” says Edmund F. Murphy III, president and CEO of Empower Retirement. “We believe that personalized strategies help employees stay engaged with the retirement planning process and can give them better income replacement results.”

The firm introduced the dynamic qualified default investment alternative (QDIA) concept to the retirement market three years ago and launched DRM in 2017. With this solution, Empoyer notes advisers will no longer have to choose between target-date funds and managed accounts. DRM provides employees a glide path in the target-date series. Once employees reach a certain age, they can transition into a more personalized managed account based on their individual circumstances, while still using the investment options.

“Investment options matter and as employees get closer to retirement they need more help making decisions,” Murphy says. “It’s not just about investment. It’s also taking in to consideration when to retire, how much to save, how and when to start claiming Social Security and having someone to talk to about all of these issues.”

Along with American Funds, Empower is working with other asset managers to offer DRM using their investment products.