Investment Product and Service Launches

Art by Jackson Epstein

OneAmerica Expands Group Annuity Platform With ESG Offerings

OneAmerica has added 12 environmental, social and governance (ESG) investment offerings to its group annuity platform, due to increasing interest in ESG investing over the last six months.

“For some, the value of an investment is no longer just about returns, but about returns that are achieved in concert with making a positive impact on society and the world at large,” says Sandy McCarthy, president of OneAmerica Retirement Services. “ESG indexes can achieve these dual ideals, because, as Morningstar research shows, they favor companies with healthier balance sheets, stronger competitive advantages and lower volatility than their mainstream counterparts.”

Between 2016 and 2018, sustainable, responsible and impact (SRI) investing assets grew more than 38%, rising from $8.7 trillion in 2016 to $12 trillion in 2018, according to the U.S. Forum for Sustainable and Responsible Investment (US SIF).

Investment professionals use standard criteria to evaluate potential investments to determine if they qualify as an ESG investment option. This includes environmental criteria, which considers how a company performs as a steward of nature; social criteria—how a company manages relationships with employees, suppliers, customers and the communities where it operates—and governance, which deals with a company’s leadership, executive pay, audits, internal controls and shareholder rights.

“We provide a full range of investment options, and ESG investing is appealing to a segment of the retirement plan participant community who want to invest in things they believe in to make a positive impact on society and the world at large beyond just returns,” says Terry Burns, managing director, products and  investments, retirement services. “To these investors, there are investment options out there that think the way they think. Our broad menu of ESG funds satisfies that desire.”

ESG funds were added during the second and third quarters. Adding these investment options to the group annuity platform means they are now fully available to OneAmerica clients.

Vanguard Adds International Core Stock Fund, Overseen by Wellington Management

Vanguard has introduced the Vanguard International Core Stock Fund (VWICX), expanding its actively managed roster of more than 70 mutual funds and exchange-traded funds (ETFs).

The new fund, which will be managed by Wellington Management Co. LLP, includes three additional active offerings introduced over the past year: Vanguard Global ESG Select Stock Fund, Vanguard Commodity Strategy Fund and Vanguard Global Credit Bond Fund.

Vanguard International Core Stock Fund is designed to be a core holding, offering an active portfolio of developed and emerging market equities that is designed to outperform across regions, styles and sectors. Vanguard advocates for investing in international stocks and bonds for the diversification and return potential, but its research indicates that many U.S. investors exhibit “home bias” and have inadequate exposure to international securities.

Wellington Management seeks to build an “all-weather” portfolio that prioritizes stock-specific exposure, limiting the portfolio’s style, factor, region and industry risk exposure through a sophisticated and centralized risk management approach. The firm’s approach targets an opportunity set of 350 to 400 companies, of which the fund will seek to hold approximately 60 to 100 large- and mid-cap stocks based on its assessment of each company’s management team, capital allocation and competitive advantage.

Vanguard International Core Stock Fund will be managed by Kenneth L. Abrams, senior managing director and equity portfolio manager, and F. Halsey Morris, CFA [Certified Financial Analyst], senior managing director and global industry analyst.  

Vanguard International Core Stock Fund will be offered in Admiral Shares, with an estimated expense ratio of 0.35%, and Investor Shares, with an estimated expense ratio of 0.45%, both considerably lower than the asset-weighted average expense ratio of 0.75% for the industry’s large-blend fund category.