Products July 14, 2022

Investment Product and Service Launches

Northern Trust Front Office Solutions enhances liquidity management solutions for asset owners and Wilshire brings to market third-gen factor index series.

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Wilshire Brings to Market Third-Gen Factor Index Series

Wilshire, a global financial services firm, has announced the launch of the FT Wilshire Pure Factor Index Series and the FT Wilshire Multi-Factor Index Series. Each new index launched over the past 12 months overcomes systematic issues that have been the result of legacy technology and index construction. With the new factor indexes, investors can now implement factor allocation decisions without unintended exposures.

Wilshire has undergone a complete modernization of the standard index business model to ensure that its products and licensing are completely investor focused. The investment community will be better equipped to identify opportunities, assess risk and access markets as the markets continue to evolve.

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“The market has evolved considerably over the last few decades and many index designs that were formulated during that time are not appropriate for today’s market,” says Wilshire CEO Mark Makepeace. “We’ve built a modern index platform that has given us the agility to test ideas and construct better indexes to overcome the persistent challenges of current incumbent benchmarks. The new third generation factor index series provides more precision in targeting specific factor and multi factor exposures and provides an innovative approach to automating the selection of a diversified set of factors.”

Northern Trust Front Office Solutions Enhances Liquidity Management Solutions for Asset Owners

Northern Trust has launched an enhanced liquidity management data tool in its Front Office Solutions platform. The web-based tool gives asset owners with significant allocations to private market assets better control over their liquidity through unified and customized reporting.

The web-based Liquidity Management module offers users a comprehensive view of their portfolio’s liquidity based on several factors, including private equity real-time data and expected cash flows as well as complex hedge fund contractual terms and conditions.

The tool allows asset owners to monitor and assess their cash flow pacing across private and public markets through a custom time horizon feature, removing the burdensome manual steps that investors often take. Adding a visual element, the tool gives users the ability to view their cash flow pacing through bar charts, providing an enhanced perspective for evaluating highly complex liquidity scenarios.

Front Office Solutions is an integrated, cloud-based service and data platform that enables investment offices to view data from disparate sources across all asset classes in one central repository. It serves complex asset owners including foundations, endowments, family offices, pensions and outsourced chief investment officers with the data they need, in the format they need it, enabling them to make informed investment decisions that help them achieve their strategies.

Investing July 13, 2022

401(k) Investors Favored Fixed-Income Funds in June

All but three days in the month had net trading flows going from equities to fixed income.

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Alight Solutions has published the June update of its 401(k) Index, noting that it was another active trading month for investors.

There were five above-normal trading days in June, Alight says. All but three days in the month had net trading flows going from equities to fixed income.

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On average, 0.015% of 401(k) balances were traded daily, compared to an average of 0.018% last month. Investors favored moving assets into fixed-income funds during 18 out of 21 trading days. Trading inflows exclusively went to fixed-income funds with stable value leading the way, while outflows were primarily from target-date, large U.S. and international equity funds, Alight says.

After reflecting market movements and trading activity, average asset allocation in equities decreased from 68.8% in May to 67.7% in June, Alight says. New contributions to equities decreased from 69% in May to 68.7% in June.

According to the index, a “normal” level of relative transfer activity is when the net daily movement of participants’ balances, as a percent of total 401(k) balances within the index, equals between 0.3 times and 1.5 times the average daily net activity of the preceding 12 months. A “high” relative transfer activity day is when the net daily movement exceeds two times the average daily net activity. A “moderate” relative transfer activity day is when the net daily movement is between 1.5 and two times the average daily net activity of the preceding 12 months.

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