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Products July 27, 2017
Investment Products and Services Launches
Pensionmark rolls out new investment reporting tools; American Century enhances One Choice Target-Date Portfolios; Nationwide partners
with Hueler for new annuity; and more.
Reported by Javier Simon
Vanguard Launches Global Balanced Funds
Vanguard has expanded its balanced fund lineup with the addition of two actively-managed, globally focused vehicles.
The Global Wellington Fund will seek to provide long-term capital appreciation and moderate current income through a globally diversified portfolio invested in both equities and fixed income securities. It will have approximately 65% of assets invested in equities and 35% of assets invested in fixed income.
The Global Wellesley Income Fund will take a more conservative approach in primary pursuit of a high and sustainable level of current income, along with moderate long-term capital appreciation. Approximately 65% of its portfolio will be allocated to fixed income securities and 35% to equities.
Wellington Management Company LLP (WMC) will serve as the investment adviser to these new funds.
“The Global Wellington and Global Wellesley Income Funds will offer investors the convenience of a turnkey investment program in a single fund, providing broad diversification among global stocks and bonds,” says Vanguard CEO Bill McNabb. “The funds reflect a thoughtfully constructed mix of domestic and international securities and represent Vanguard’s fundamental, time-tested investment principles—balance, diversification, discipline, low-cost, and a long-term orientation.”
NEXT: Pensionmark Rolls Out New Investment Reporting Tools
Pensionmark Rolls Out New Investment Reporting Tools
In an effort to provide plan sponsor and adviser clients with more comprehensive support in investment analysis, Pensionmark has unveiled a series of proprietary reporting tools.
These offerings include the SMART Score Investment Monitoring System and qualitative Manager Research Reports, as well as Target-Date and Stable Value Analytic Reports.
SMART Score is a scoring system monitoring client investment lineups. The tool identifies investment managers whose approach more properly aligns with that of retirement savers, while flagging and addressing those whose approach does not. The scoring system emphasizes consistency and long-term, risk-adjusted outperformance versus peers.
The Manager Research Reports provide a full accounting of the qualitative aspects of an investment strategy under consideration by a plan sponsor. These reports highlight details such as investment strategy, buy-and-sell decisions, risk controls, and manager and analyst compensation.
The Target-Date and Stable Value Analytic Reports provide additional quantitative and qualitative analysis specific to those investment types beyond the SMART score data. Advisers and plan sponsors can view their current target-date series or stable value fund either as a standalone or benchmarked against up to three other options.
Data and analysis for these new tools is gathered and prepared at the Pensionmark corporate offices and delivered to advisers and plan sponsors on demand.
"As a firm, we reached a point where there wasn't a tool out there that provided our advisers and plan sponsors with the breadth and depth they were looking for,” says Ronnie Cox, director of Investments for Pensionmark. As opposed to relying on third-party tools, creating in-house reporting not only allows us to provide unbiased analysis, but also take full control over enhancements to stay on top of the latest regulatory, legislative and industry changes to address client needs."
NEXT: ProShares Launches Rising-Rates Focused ETFProShares Launches Rising-Rates Focused ETF
The ProShares Equities for Rising Rates ETF will aim to outperform traditional large-cap indexes such as the S&P 500 in a rising interest rate environment. The fund is benchmarked to the Nasdaq U.S. Large Cap Equities for Rising Rates Index and is listed on the NASDAQ exchange.
“EQRR is for investors who expect rising interest rates and want to outperform traditional large-cap indexes as rates go up,” says Michael L. Sapir, co‑founder and CEO of ProShare Advisors, LLC, the adviser to ProShares. “EQRR takes those sectors most positively correlated with interest rates, then within those sectors invests in the companies that have tended to outperform during periods of rising rates."
The exchange-traded fund (ETF) tracks an index employing a methodology that starts with the 500 largest listed U.S. stocks and selects the five U.S. large-cap sectors that have most recently demonstrated the highest correlation to weekly changes in 10-year U.S. Treasury yields. It then identifies the top 10 stocks in each sector that have the highest correlation of relative performance—versus 500 of the largest listed U.S. stocks—to changes in the 10-Year yield. Stocks in sectors with a higher correlation to rising rates have a heavier weighting in the index. This process is repeated quarterly to maintain a portfolio of 50 stocks. The resulting portfolio aims to provide relative outperformance compared to traditional large-cap indexes during periods of rising U.S. Treasury interest rates.
NEXT: American Century Enhances One Choice Target-Date Portfolios
American Century Enhances One Choice Target-Date Portfolios
In an effort to revamp its risk-management strategy and reduce fees, American Century Investments is rolling out a series of enhancements to its One Choice Target-Date Portfolios which are designed to help investors reach a comfortable retirement.
“The introduction of Dynamic Risk Management on July 31 will allow us to fine-tune the balance of risks for a broad range of participants," says Rich Weiss, CIO, Multi-Asset Strategies.
The team uses a proprietary signal to determine the market environment and determine a set of allocation rules for investors. The signal picks up on intermediate-term trends to capture larger environmental shifts while limiting turnover and preventing reactions to short-term market noise, Weiss explains.
Working from this data, the team will aim to push younger investors deeper into equities when market environments are favorable of stocks in order to hedge against the risk of longevity. In unfavorable market environments, as determined by the team’s research, the group would move participants closer to retirement away from equity exposure in order to preserve their savings.
"We have always believed that the slope of the glide path, or how much you change risk over time, has a definitive relationship with investor outcomes,” says Weiss. “It's our opinion that a flatter guide path slope helps to minimize the potentially harmful effects of market cyclicality and reduce unwanted volatility for participants."
NEXT: Nationwide Partners with Hueler for New Annuity
Nationwide Partners with Hueler for New Annuity
Nationwide is partnering with Hueler Income Solutions to offer its INCOME Promise Select single premium immediate annuity (SPIA) on the Income Solutions platform.
The Income Solutions platform is a fully automated annuity marketplace created specifically for the active employee or retiree who may want or need to convert a portion of retirement savings into a guaranteed income stream.
With this annuity, a person can generate income for an individual or two people for a specific period of time or for life. Its liquidity feature allows a person to take a lump-sum withdrawal in the event of a financial emergency. This feature is available with any payment option that includes a term-certain or cash-refund
"Nationwide is pleased to partner with Hueler and join the Income Solutions platform, offering our INCOME Promise Select immediate annuity," says Mike Morrone, associate vice president of fixed annuity strategy at Nationwide. "This opportunity will provide investors a way to receive a guaranteed stream of income and supports our mission to help Americans prepare for and live in retirement."