Products September 29, 2022

Investment Product and Service Launches

AllianzIM announces new ticker symbols for eight buffered outcome ETFs; ARK Investment Management launches the ARK Venture Fund; Putnam Investments to launch two active ETFs; and more.

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New York Life Launches Wealth Plus

New York Life has announced the launch of Wealth Plus, which comprises two new life insurance solutions. The Wealth Plus series seeks to provide death-benefit protection and early, tax-advantaged cash value accumulation potential, enabling clients to maximize the benefits of life insurance as part of their financial strategy.

The solutions can work alongside traditional retirement savings options by combining the protection of a death benefit with tax-efficient accumulation potential, future tax-free supplemental retirement income and an expedited application process.

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The two solutions, Secure Wealth Plus and Market Wealth Plus, are designed to help give policy owners the opportunity to accumulate wealth in a more efficient, tax-advantaged way, while accommodating their risk tolerance. Secure Wealth Plus provides life insurance protection and a stable path toward wealth accumulation with additional growth potential through dividends. Market Wealth Plus is long-term life insurance protection and offers exposure to the equity market, which can offer the potential for greater asset accumulation.

Vanguard to Liquidate U.S. Liquidity Factor ETF

Vanguard has announced that the $44.2 million Vanguard U.S. Liquidity Factor ETF will be liquidated in late November.

The firm’s remaining U.S. factor products have a combined $3.4 billion in assets and will continue. The exchange-traded funds are actively managed by Vanguard Quantitative Equity Group, enabling daily portfolio assessment and potential rebalancing to mitigate factor drift.

Shareholders are being notified and have the opportunity to sell their shares prior to the ETF delisting from Cboe BZX Exchange, Inc. at the close of business on or about November 22. On the liquidation date, the remaining ETF assets will be sold, and the proceeds distributed.

John Hancock Investment Management Announces ETF Lineup Changes

John Hancock Investment Management, a company of Manulife Investment Management, has announced that it plans to close and liquidate 10 sector ETFs. The decision reflects how these funds have been used by investors over the past seven years and how sector investing has shifted in the market.

The board of trustees of John Hancock Exchange-Traded Fund Trust has determined that the continuation of the funds isn’t in the best interest of the funds or their shareholders, and as such decided to close and liquidate the John Hancock Multifactor Consumer Discretionary ETF; John Hancock Multifactor Consumer Staples ETF; John Hancock Multifactor Energy ETF; John Hancock Multifactor Financials ETF; John Hancock Multifactor Healthcare ETF; John Hancock Multifactor Industrials ETF; John Hancock Multifactor Materials ETF; John Hancock Multifactor Media and Communications ETF; John Hancock Multifactor Technology ETF; and the John Hancock Multifactor Utilities ETF.

The funds will stop accepting creation orders after the close of business on October 17, and will cease trading on the NYSE Arca, Inc. at market close on October 24.

When a fund commences liquidation, it will no longer pursue its stated investment objective or engage in any business activities except for the purposes of selling and converting into cash all of the assets of the fund, paying its liabilities and distributing its remaining proceeds or assets to shareholders. During this period, each fund is likely to incur a higher tracking error than is typical for the fund. Furthermore, during the time between market close on October 24 and October 26 (the liquidation date), shareholders will be unable to dispose of their shares on NYSE Arca. Shareholders who continue to hold shares of a fund on the liquidation date will receive a liquidating distribution with a value equal to their pro rata share of the fund’s assets on that date.

These closures only affect the 10 John Hancock sector ETFs, representing approximately 5% of John Hancock’s overall ETF assets. No other ETFs offered by John Hancock Investment Management are affected by these closures.

In parallel with this announcement, John Hancock Investment Management is also announcing the approval of a new John Hancock U.S. High Dividend ETF, scheduled to launch later this month. It has also filed an initial registration statement to launch John Hancock International High Dividend ETF later this year.

The investment objective of JHDV is to seek a high level of current income with long-term growth of capital as a secondary objective. Under normal market conditions, the fund invests at least 80% of its net assets (plus any borrowings for investment purposes) in dividend-paying U.S. large- and mid-cap equity securities. These dividend-paying U.S. large- and mid-cap equity securities are incorporated in, or have their primary listing in, the United States.

The ETF is actively managed and subadvised by Manulife Investment Management (U.S.) LLC, John Hancock Investment Management’s affiliated asset manager.

AllianzIM Announces New Ticker Symbols for Eight Buffered Outcome ETFs

Allianz Investment Management LLC, a wholly owned subsidiary of Allianz Life Insurance Company of North America, has announced a ticker symbol change for eight existing AllianzIM Buffered Outcome ETFs effective October 31.

The new tickers start by depicting a three-letter indicator for the outcome period month followed by either a “T” to represent 10 for the Buffer10 funds, or “W” to represent 20 for the Buffer20 funds. The change in each fund ticker symbol will have no effect on its investment objective, strategy or fees and expenses and no action is required by current shareholders of the funds as a result of this change.

The AllianzIM U.S. Large Cap Buffer10 and Buffer20 ETFs seek to match the returns of the reference asset up to a stated upside cap, while seeking to provide a buffer against the first 10% or 20% of the reference asset losses for the current outcome period.

ARK Investment Management Launches the ARK Venture Fund

ARK Investment Management LLC has announced the launch of the ARK Venture Fund, a regulated public fund investing in innovative private and public companies that all U.S. investors can access through Titan, an investment app.

The ARK Venture Fund is an actively managed crossover fund that invests in private and public companies focused on technologically enabled innovation and in other venture capital funds. Any individual U.S. investor can potentially invest in the fund, with a minimum investment of $500, without encountering qualification or accreditation thresholds.

The ARK Venture Fund charges a management fee of 2.75% but does not charge any carried interest or load fees. The total expense ratio of the fund is estimated to be 4.22%. Additionally, the ARK Venture Fund offers liquidity up to 5% of the fund’s net asset value on a quarterly basis.

Putnam Investments to Launch Two Active ETFs

This Friday, Putnam Investments will begin to offer two new transparent, actively managed equity ETFs. The firm will be launching Putnam BDC Income ETF, concentrating in business development companies, and Putnam BioRevolutionTM ETF, centered on companies operating at the intersection of technology and biology in the “biology revolution.”

The Putnam BDC Income ETF will represent the first actively managed business development company ETF in the marketplace, investing in a host of BDC opportunities with an eye toward generating income for investors.

Schwab to Launch the Schwab Municipal Bond ETF

Schwab Asset Management, the asset management arm of The Charles Schwab Corporation, has announced the launch of the Schwab Municipal Bond ETF. The first day of trading is expected to be on or about October 12.

The Schwab Municipal Bond ETF comes to market with an expense ratio of 0.03%. This ETF provides access to the broad U.S. investment grade, tax-exempt bond market with the additional benefit of potentially higher tax efficiency of its ETF structure. It can serve as part of the core of a diversified portfolio.

The Schwab Municipal Bond ETF’s goal is to track as closely as possible, before fees and expenses, the total return of the ICE AMT-Free Core U.S. National Municipal Index, which measures the performance of the U.S. AMT-free municipal bond market. It seeks to provide income exempt from federal taxes and not subject to the federal alternative minimum tax. The fund has a high credit quality profile, investing only in investment-grade rated securities.

J.P. Morgan Asset Management Expands Tax-Smart Platform

J.P. Morgan Asset Management has announced the launch of J.P. Morgan-Tax-Managed U.S. Large Cap Leaders, which will be available through its Tax-Smart Platform. The strategy offers investors the opportunity to combine the active management of J.P. Morgan’s equity investors, portfolio customization, tax-smart investing and automated daily tax-loss harvesting in one portfolio.

Tax-Managed U.S Large Cap Leaders is both index and active, which will be launched over the next year. The platform combines J.P. Morgan’s investment experience with 55ip’s tax-smart technology and is one of the first of its kind to offer actively managed and index-based SMAs, and model portfolios of mutual funds and ETFs, in one digital portal, delivering seamless portfolio customization, tax management and reporting functionality.

Data and Research September 28, 2022

Workers Delaying Retirement Has Doubled Since Last Year

For employers, the recent upward trend in delayed retirement is causing complications, according to a new report from Nationwide Retirement Institute.  

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Workers are delaying retirement because of inflation, which is affecting employers’ ability to hire new workers and promote personnel, according to a new report from Nationwide Retirement Institute.

The 2022 Nationwide In-Plan Lifetime Income Survey found that 40% of workers age 45 and older are delaying their retirement because of rising living costs—double those who said they delayed retirement last year because of the COVID-19 pandemic.

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“We’re watching delayed retirements impact employers’ entire talent lifecycle, and it may be unintentionally contributing to ‘quiet quitting,’” Amelia Dunlap, vice president of Nationwide Retirement Solutions marketing, said in a press release.

Nationwide Institute data show that 36% of private-sector employers say workers’ delayed retirements have affected their ability to hire new talent. In addition, 34% said delayed retirements have affected promoting young workers and 35% said they have made their health benefits plans more expensive. Nationwide also found that employers are reporting effects to the well-being of their employees because of delayed retirements.

Data show that among employers, 30% reported lower team morale, 29% reported negative effects on employees’ mental health, 27% have noticed lower workforce productivity and 22% reported negative effects on the physical health of employees.

“Employers may find themselves with a workforce that lacks motivation to go above and beyond without the ability to reward employees for a job well done,” Dunlap added. “Employers should look for opportunities to better support their older workforce as they near retirement.”

The study also found that 24% of all workers feel they are on the wrong track for retirement, an increase of 10 percentage points compared to 2021, while 58% of workers have a positive outlook on their retirement plan and financial investments, compared with 72% one year ago.

Additionally, the Nationwide Retirement Institute found that 66% of employees cited inflation as a top retirement concern, versus 53% in 2021.  

An analysis across the public and private sectors shows that government employees are more optimistic than private-sector employees are about their retirement security: 28% of government employees are expecting to delay their retirement because of inflation, compared with 41% of private-sector workers, according to Nationwide data.

Accordingly, 75% of government workers said they are on the right track with regard to preparing financially for retirement, versus 56% of private-sector employees.

“Employers must invest now in solutions and benefits that help their employees enhance their financial security and give them greater confidence that they can retire ‘on time,’” Dunlap said. “The private sector has an opportunity to invest in solutions that are already enjoyed by the public sector, such as in-plan guaranteed lifetime income solutions. Like pensions, they offer a steady stream of predictable income for life.”

The Nationwide report does show growing interest from workers in lifetime income investment options.

According to the data, 53% of all employees age 45 and older are interested in guaranteed lifetime income investment options included as part of a target-date fund, compared with 42% in 2021; 48% reported they are interested in contributing to such investment options as part of a managed account; and 41% would likely roll over retirement savings into a guaranteed lifetime income investment option if they had the option—a six-point increase from last year.

“Our research shows that employers and employees alike are starting to realize that guaranteed lifetime income offers unique confidence that workers are protected against inflation and market volatility and that individuals won’t outlive their savings,” Dunlap said. “Employers should work with their retirement plan adviser or consultant to help find the right investment solutions to set up their workforce for long-term financial success and the growth of the next generation of talent.”

The report was conducted by Edelman Data and Intelligence in an online survey on behalf of Nationwide from July 14 to August 5. The respondents included 500 corporate plan sponsors, 100 public-sector plan sponsors, 1,000 plan participants age 45 and above with access to a 401(k), 403(b), 457(b) or other tax-preferred defined contribution plan at work and 100 plan participants age 35 to 44 with access to a 401(k), 403(b), 457(b) or other preferred defined contribution plan at work.

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