Investment Product and Service Launches

Hartford Funds builds ESG-focused ETF; MSCI acquires RCA; and Wilshire releases systematic cross premia index.

Hartford Funds Builds ESG-Focused ETF

Hartford Funds has launched its first environmental, social and governance (ESG)-focused exchange-traded fund (ETF), Hartford Schroders ESG U.S. Equity ETF (CBOE: HEET), which will be sub-advised by Schroder Investment Management North America Inc. and Schroder Investment Management North America Ltd.

HEET seeks long-term capital appreciation by investing in a diversified portfolio of equities and equity-related securities of U.S. companies and in investments that are expected to meet environmental, social and/or governance criteria, as identified by the fund’s sub-advisers. The fund will seek to achieve a better ESG profile compared with its benchmark, the Russell 1000 Index.

Never miss a story — sign up for PLANSPONSOR newsletters to keep up on the latest retirement plan benefits news.

Using a systematic investment approach developed by Schroders, companies in the universe will be assessed quantitatively on their ESG criteria and factor characteristics, including value, profitability, momentum and low volatility. ESG measures include, but are not limited to, the strength of environmental practices, climate change impact and positive stakeholder relationships.

HEET will seek to hold a diversified portfolio of U.S. stocks with favorable combinations of ESG and factor exposures. Additionally, the fund is designed to have less than half the carbon footprint—which is measured by carbon emissions divided by sales—of its benchmark.

“The Hartford Schroders ESG U.S. Equity ETF enables us to offer a flexible, cost-effective strategy that is designed to help investors achieve their long-term investment goals, while also having a positive influence on our world,” says Vernon Meyer, chief investment officer (CIO) at Hartford Funds. “We believe that applying ESG principles to an ETF, and leveraging Schroders’ quantitative investing expertise and proprietary approach to ESG investing, can provide stronger returns and make for a better investor experience on multiple levels.”

HEET is listed on the CBOE BZX Exchange Inc., and its estimated expense ratio is 0.39%. Ashley Lester, head of systematic investments at Schroders, will serve as the portfolio manager of the ETF.

MSCI Acquires RCA

MSCI Inc. has entered into a definitive agreement to acquire Real Capital Analytics (RCA) for $950 million in cash.

Founded in 2000, Real Capital Analytics is a private company and provider of the properties, transactions and participants that drive the commercial real estate capital markets globally.

MSCI will leverage Real Capital Analytics’ database of more than $20 trillion of commercial property transactions linked to over 200,000 investor and lender profiles.

The transaction is expected to be funded with existing cash on hand and close at the end of the third quarter or early in the fourth quarter of 2021, subject to regulatory approvals and customary closing conditions. Real Capital Analytics’ financial results will be presented as part of MSCI’s All Other – Private Assets reportable segment. 

Wilshire Releases Systematic Cross Premia Index


Wilshire has launched its new Powered by Wilshire index, the Systematic Cross Premia Index. Created by Asset Management One USA Inc. (AMO USA) and calculated by Wilshire, the index aims to measure the performance of liquid risk premia across a broad cross-section of factors diversified over asset class and style and valued daily.

Asset classes include fixed income, credit, foreign exchange, equity indexes, commodities and a multi-asset group; styles include carry, value, momentum and defensive.

“In creating this index, we leveraged our long history of developing and analyzing risk premia strategies to construct a diverse representation of the investable risk premia universe. The index is designed to mimic an implementable portfolio with built-in risk controls, while pursuing diversification across asset classes and investment styles. As such, the index covers a wider variety of strategies beyond traditional carry, value and momentum strategies, reflecting the industry’s evolution,” says Kazuhiro Shimbo, chief investment officer (CIO), quantitative strategies, at AMO USA.

“Wilshire and AMO USA have partnered in the risk premia space since 2015, using bank risk premia strategies to create and complete portfolios for clients. As investors in the space, we recognize the importance of a relevant performance benchmark and we are pleased to extend the partnership with this index, which combines Wilshire’s calculation expertise and AMO USA’s quantitative approach to factor investing,” adds Jason Schwarz, president and chief operating officer (COO) of Wilshire.

Ensuring Clean Participant Data

Keeping participant data accurate could help plan sponsors avoid dealing with missing participants or a cybersecurity attack.

One of the most critical aspects in maintaining a healthy retirement plan is guaranteeing clean participant data, says John Bikus, president of PBI Research Services, a provider of death audit and location services.

Having correct Social Security numbers and dates for critical life points, including birth and retirement, is integral to identifying missing and deceased participants, Bikus says. He points out that defined benefit (DB) plan overpayments, such as to a deceased participant, also decrease the plan’s assets, affecting its funding.

Never miss a story — sign up for PLANSPONSOR newsletters to keep up on the latest retirement plan benefits news.

Bikus adds that the pandemic might have increased the incidence of missing participants, as former employees might have moved or died.

In light of this, plan sponsors should have a system of communications in place to verify or update addresses yearly or periodically, Bikus suggests. He recommends the same thing for verifying or updating beneficiary information.

Educating participants about why it’s important to keep their own data up to date is crucial to keeping data clean, says Rick Irace, chief operating officer (COO) at Ascensus Retirement. It is especially important when starting a new plan or when converting to a new recordkeeper, he adds. At these times, Ascensus’ first-year readiness team explains to participants what their data will be used for and how they can provide it.

Ascensus has created a system that disallows plan sponsors to send incorrect data, says Irace. “If there are certain things that we are requiring them to send, we’re going to ensure that none of those fields come back blank,” he notes.

In addition, Ascensus has set up online forms to have required fields, which prevents users from completing the forms before the necessary information is added. “That is a systematic way to prevent [plan sponsors and participants] from entering bad data before they can send it to us through the system,” Irace notes.

For plan sponsors moving to a new provider or consolidating providers, Ascensus offers a data management and reconciliation service. The company works with payroll providers to decrease the chance of errors.

Irace adds that having clean data also reduces the risk of cybersecurity threats.

Bikus recommends that plan sponsors that are outsourcing duties to multiple providers decrease the number they use to lessen the risk of cybersecurity hacks. Working with multiple providers could create inconsistency and discrepancies in data. The more personal information that’s passed around among providers, the more likely the chance of exposure, and imminently, an attack, he says. “That could expose personal information, which could result in identity theft for plan participants, as well as an attack on retirement plan systems,” he says.

«