For more stories like this, sign up for the PLANSPONSOR NEWSDash daily newsletter.
Products April 9, 2020
Investment Product and Service Launches
BNY Mellon expands investment lineup with ETFs, and American Century launches actively managed ETFs.
Reported by Amanda Umpierrez
Art by Jackson Epstein
BNY Mellon Expands Investment Lineup With ETFs
BNY Mellon Investment Management has expanded its investment solutions lineup with the introduction of eight exchange-traded funds (ETFs), which are designed to cover the core exposures in a typical asset allocation strategy.
The first three Morningstar-benchmarked equity ETFs (BNY Mellon US Large Cap Core Equity ETF; BNY Mellon US Mid Cap Core Equity ETF; BNY Mellon US Small Cap Core Equity ETF) will commence trading on the New York Stock Exchange (NYSE).
In the coming weeks, BNY Mellon expects to launch two additional Morningstar-benchmarked equity ETFs, the BNY Mellon International Equity ETF and BNY Mellon Emerging Markets Equity ETF, followed by three fixed-income ETFs benchmarked against the Bloomberg Barclays Fixed Income indices.
The complete range of BNY Mellon Investment Management’s eight ETFs to be listed on the NYSE are:
Products | Fee Level | Benchmarks | Ticker Symbol |
BNY Mellon US Large Cap Core Equity ETF | 0.00% | Morningstar US Large Cap Index | BKLC |
BNY Mellon US Small Cap Core Equity ETF | 0.04% | Morningstar US Small Cap Index | BKSE |
BNY Mellon US Mid Cap Core Equity ETF | 0.04% | Morningstar US Mid Cap Index | BKMC |
BNY Mellon International Equity ETF | 0.04% | Morningstar Developed Markets ex-US Large Cap Index | BKIE |
BNY Mellon Emerging Markets Equity ETF | 0.11% | Morningstar Emerging Markets Large Cap Index | BKEM |
BNY Mellon Core Bond ETF | 0.00% | Bloomberg Barclays US Aggregate Total Return Index | BKAG |
BNY Mellon Short Duration Corporate Bond ETF | 0.06% | Bloomberg Barclays US Corporate 1-5 Years Total Return Index | BKSB |
BNY Mellon High Yield Beta ETF | 0.22% | Bloomberg Barclays US Corporate High Yield Total Return Index | BKHY |
The investment adviser for the ETF range is BNY Mellon ETF Investment Adviser LLC, with Mellon Investments Corp. (Mellon) serving as the sub-adviser. Mellon is a BNY Mellon multi-asset investment firm with more than $545 billion of assets under management that provides institutional-quality portfolio construction and risk management.
The ETF range will be available to individual investors and financial advisers through certain authorized broker/dealers (B/Ds) and registered investment advisers (RIAs). As an added benefit to clients, all BNY Mellon ETF assets held on the Pershing platform will be made available with no custody fees where applicable.
American Century Launches Actively Managed ETFs
American Century Investments has launched two actively managed, semi-transparent exchange traded funds (ETFs) using Precidian Investments’ ActiveShares methodology: American Century Focused Dynamic Growth ETF (FDG) and American Century Focused Large Cap Value ETF (FLV).
The semi-transparent structure will allow American Century to deliver its actively managed investment strategies in an ETF vehicle without the daily holdings disclosure requirement of fully transparent ETFs. The funds will be available exclusively through Cboe BZX Exchange with Citadel Securities LLC as the lead market maker, serviced by State Street, which is both Authorized Participant Representative (APR) and custodian, and with IHS Markit as the verified intraday indicative value (VIIV) calculator.
“We’re pleased to be the first firm to offer semi-transparent active ETFs to our clients,” says Jonathan Thomas, American Century Investments’ chief executive officer. “Our goal at American Century Investments has long been providing active management solutions that meet their evolving needs.”
Precidian’s ActiveShares patented ETF structure seeks to provide asset managers with the ability to generate excess return without daily disclosure of their proprietary strategies while simultaneously creating significant improvements in tax efficiency, manager flexibility and lower operating costs.
Focused Dynamic Growth (FDG) invests in stocks of early and rapid stage large-cap growth companies with the potential to increase in value over time. The fund is managed by Keith Lee, senior vice president and senior portfolio manager; Michael Li, vice president and senior portfolio manager; Prabha Ram, portfolio manager; Henry He, portfolio manager; and Rene Casis, ETF portfolio manager.
Focused Large Cap Value (FLV) invests in large-cap, high-quality companies the managers believe are temporarily selling at a discount. The fund is managed by Phillip Davidson, senior vice president and executive portfolio manager; Brian Woglom, vice president and senior portfolio manager; Phil Sundell, portfolio manager; Kevin Toney, chief investment officer, Global Value Equity and senior portfolio manager; Michael Liss, vice president and senior portfolio manager; and Rene Casis, ETF portfolio manager.
The Focused Dynamic Growth and Focused Large Cap Value ETFs join American Century’s ETF suite comprised of American Century Diversified Corporate Bond ETF (KORP), American Century Diversified Municipal Bond ETF (TAXF), American Century Quality Diversified International ETF (QINT), American Century STOXX U.S. Quality Growth ETF (QGRO) and American Century STOXX U.S. Quality Value ETF (VALQ).