Products September 15, 2022

Investment Product and Service Launches

MSCI’s new analytics platform aims to streamline investors’ risk management processes; BrightPlan launches equity compensation planner; and more.

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MSCI Insights Aims to Streamline Investors’ Risk Management Processes

MSCI Inc., a provider of decision-support tools and services for the global investment community, has announced the launch of Risk Insights, the first module of a new analytics platform, MSCI Insights, that calculates, stores and delivers a range of risk measures to help investors identify trends and respond to rapid changes in markets.

Institutional investors will be able to access a range of MSCI data and analytics through MSCI Insights, which will feature performance attribution, index data and ESG/climate data modules. Additional MSCI Insights modules are slated for release in the fourth quarter of this year and in 2023. 

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MSCI Risk Insights automates many analysis and reporting tasks otherwise performed manually by risk analysts. Automation allows investors to efficiently understand the overall level of risk in their portfolios, the changes in the risk, the causes of the changes and the actions that can be taken to achieve their investment goals. 

MSCI Risk Insights provides investors with historical risk data and the ability to customize a set of dashboards containing a broad set of metrics, including time-series risk, factor risk and stress tests.

BrightPlan Launches Equity Compensation Planner

BrightPlan, a financial wellness firm, has announced its new Equity Compensation Planner, available as part of the company’s total financial wellness solution.

According to BrightPlan, the new solution gives employees the digital tools and professional financial guidance they need to view and manage their employer-provided equity compensation. This enables employers to better retain and engage top talent by demonstrating the value of equity compensation—a key component of an employee’s total rewards package.

Through its self-serve capabilities, BrightPlan’s Equity Compensation Planner seeks to enable employees to track estimated equity value in near real-time for public company stock, as well as view potential value over time and trading windows, so they know when they can trade their equity.

Employees also have access to tailored educational content to learn about how equity compensation works. The solution includes unlimited access to BrightPlan financial planners. Employees can link other investment accounts to BrightPlan and have the ability to see all their investments in a single place.

AllianceBernstein Launches Active ETFs

AllianceBernstein Holding L.P. and AllianceBernstein L.P. have announced the launch of a new set of active exchange-traded funds on the New York Stock Exchange. The new funds are the AB Ultra Short Income ETF and the AB Tax-Aware Short Duration Municipal ETF. 

Global trading firm Jane Street will be the lead market maker on both products. The AB Ultra Short Income ETF, an actively managed ETF, aims to deliver higher levels of yield relative to cash or cash-like investments, while aiming for capital preservation in all market cycles.

The AB Tax-Aware Short Duration Municipal ETF, an actively managed municipal bond strategy, seeks to provide relative stability of principal and a moderate rate of after-tax return and income. The ETF offers municipal bond investors a distinct complement to their core allocations, providing the opportunity to help maximize after-tax income and returns using shorter-maturity bonds and opportunistic exposure to treasuries and taxable bonds.

Vontobel Continues Multi-Boutique Expansion in North America

The active investment management firm Vontobel has launched a number of new strategies. The press release announcing the new strategies describes them as follows:

  • The Vescore Active Beta Strategy invests in global equities and government bonds with a focus on tactical risk premia management through quantitative model-based allocation and risk management to help provide allocation attuned to the prevailing market environment;
  • The Vescore Active Beta Opportunities Strategy employs allocation of five risk premia—equities, fixed income, commodities, volatility and currencies—to create robust portfolios that seek long-term, positive absolute returns, as well as diversification potential and liquidity;
  • The Global Environmental Change Strategy provides access to clean technology pioneers by seeking to invest in stocks of companies with long-term growth potential that provide solutions for clean water, clean energy, future mobility, smart building, resource efficiency or recycling;
  • The mtx Sustainable Emerging Markets Leaders Strategy invests across global emerging market equities, seeking companies with above-average quality in terms of return on invested capital and strong industry positions that are able to invest in future growth; and
  • The mtx China A-Shares Leaders Strategy seeks to invest in stocks of companies characterized by high return on invested capital and strong market positions. Stocks in the portfolio qualify as either China A-Shares or are linked to China A-Shares.
Investing September 15, 2022

Wilmington Trust Launches CIT Onboarding Tool

The tool for employer-sponsored plans seeks ‘democratization’ of the use of collective investment trusts. 

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Wilmington Trust has launched BoardingPass, an application designed to digitize and streamline the onboarding of collective investment trusts for employer-sponsored retirement plans.

CITs are an alternative to mutual funds for employer-sponsored retirement plan investments.   

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“Especially after the height of the COVID-19 pandemic, we realized that paper-only solutions would no longer work for most businesses operating in a digital or hybrid environment,” says Rob Barnett, head of Wilmington Trust retirement distribution and product leader for CIT business. “Typical CIT onboarding processes can be time-consuming, so we developed a single digital tool in which all documents and information are centrally located, thereby streamlining communication.”

Barnett says BoardingPass was launched to increase the availability and use of CITs for employer-sponsored retirement plans by removing paperwork and implementing a digital onboarding process.

The paper-based onboarding process is onerous for employer-sponsored plans wanting to use CITs, explains Barnett, because a plan’s eligibility to invest in CITs must be confirmed through a retirement plan participation agreement.

“To invest in a CIT, a plan sponsor or its delegated fiduciary has to complete a participation agreement that really represents and warrants that they’re eligible to invest in this tax-qualified vehicle,” he says. “That has left a lot of people to believe that the onboarding process for CITs must stay paper-based, and while we all work continually to try to make the paper-based process better, it really doesn’t allow for the democratization of the use of CITs. BoardingPass brings to pass the democratization of the retirement plan onboarding process, as well as adding CITs as plan options.”

CITs and Mutual Funds

A CIT is a bank-administered trust offered by banks and trust companies for retirement plans, and unlike mutual funds are not available to the public. Like mutual funds, CITs provide several investment options for retirement plan participants, across a basket of assets. CITs are pooled-account investments that hold commingled assets that must meet certain requirements.

Unlike mutual funds, which are regulated by the Securities and Exchange Commission, CITs are overseen by the Department of the Treasury Office of the Comptroller of the Currency. They can be less expensive to administer than mutual funds for plan sponsors, because while CITs are plan asset vehicles under the Employee Retirement Income Security Act, investments are not subject to the prospectus and financial reporting requirements and expense rules of the Investment Company Act of 1940.

“CITs provide a vehicle with lower fees to ensure low-cost alpha for investors,” Barnett says. “Advisers can work with plan sponsors to detail the benefits of CITs and identify the cost structure differences between CITs and mutual funds.”

Plan sponsors and advisers using CITs have attendant fiduciary duties to participants, as with mutual funds.

Unlike 401(k), 401(a) and 457(b) plans, 403(b) plans are barred from using CITs. A legislative package working its way through Congress known as SECURE 2.0, as it would build on the 2019 Setting Every Community Up for Retirement Enhancement—aka SECURE—Act, proposes to allow 403(b) plans to invest in CITs.

All Aboard

A press release announcing the app’s launch says BoardingPass users will likely reduce the time spent on onboarding because the app serves as a central hub for all plan information. Rather than requiring an employer-sponsored plan to manage reams of paperwork, which can lead to errors and takes an average of one to five business days to submit, users of the web-based platform can shorten the timeline by up to 80%, the release claims.

“Previously, the process was stagnant, intimidating and far less accessible due to the onerous amount of paperwork involved,” Barnett says.

Plan adviser users of the tool can automatically pull key data for the plan they are advising into the system from the data contained in the IRS Form 5500 database; a Form 5500 is the annual report filed by employer-sponsored plans with the Department of Labor. The tool prepopulates the correct form fields with information on a plan’s financial condition, investments and operation. Plan sponsors may be able to gain the benefit of real-time information-sharing and a digital connection to their critical service provider partners, according to the press release. 

Plan sponsors “can sort and monitor all fund requests pending approval and sort by plan name, recordkeeper or even adviser name,” says the release. “They can view all fund requests that need action (e.g., missing signature) and quickly address them.”

Barnett adds, “We have learned that the trend among all users, including consumers and businesses, is for a more user-friendly and less intimidating process when it comes to signing documents. As a result, the digitization of the plan onboarding process was necessary. This is the future of retirement planning.”

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