Products January 4, 2018

Investment Products and Services Launches

State Street Global Advisors reveals latest SPDR ETFs, and Charles Schwab announces addition of 12 ETFs to OneSource.

Reported by

State Street Global Advisors (SSGA) has announced the launch of three SPDR ETFs [exchange-traded funds] tracking Kensho New Economies indices. Designed to complement State Street Global Advisors’ existing sector and industry SPDR ETF suite, the new ETFs may help investors by providing both tactical and long-term  investment ideas with a transparent, rules-based approach.

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The three ETFs, which track proprietary index methodologies developed by Kensho Technologies, a provider of next-generation analytics, machine learning, and data visualization systems, include:

  • SPDR Kensho Intelligent Structures ETF (XKII)
  • SPDR Kensho Smart Mobility ETF (XKST)
  • SPDR Kensho Future Security ETF (XKFS)

“We are continuously looking for opportunities to provide investors with the tools necessary for tapping into key market trends and new economic developments,” says Nick Good, co-head of the Global SPDR business at SSGA. “With the launch of XKII, XKST and XKFS, investors can make targeted allocations providing exposure to the firms behind the emerging trends that are reshaping our economy, and very way of life.”

The SPDR Kensho Intelligent Structures ETF seeks to track the Kensho Intelligent Infrastructure Index. This index aims to capture companies providing advanced products and services in the areas of smart building infrastructure, smart power grids, intelligent transportation infrastructure, and intelligent water infrastructure.

The SPDR Kensho Smart Mobility ETF seeks to track the Kensho Smart Transportation Index. This index aims to capture companies providing advanced products and services in the areas of autonomous vehicles, drones and drone technology for civilian/commercial application, and advanced transport systems.

The SPDR Kensho Future Security ETF seeks to track the Kensho Future Security Index. This index aims to capture companies providing advanced products and services in the areas of cyber security, advanced border security, and the following areas for military application: robotics, drones and drone technologies, space technology, wearable technologies and virtual or augmented reality activities.

Charles Schwab Announces Addition of 12 ETFs

 

Charles Schwab announced that Schwab ETF OneSource, one of the largest commission-free ETF [exchange-traded fund] programs in the industry, is adding 12 new ETFs to its lineup. With these additions, investors and advisers can access 254 ETFs covering 69 Morningstar Categories with $0 online commissions, no enrollment requirements and no early redemption fees—key differentiators for investors comparing Schwab ETF OneSource to other commission-free ETF offerings.

Schwab ETF OneSource offers commission-free ETFs from 16 providers—ALPS, Deutsche Asset Management, Direxion, ETF Securities, Global X Funds, Guggenheim Investments, IndexIQ, John Hancock Investments, J.P. Morgan Asset Management, OppenheimerFunds, PIMCO, PowerShares, State Street Global Advisors SPDR ETFs, USCF, WisdomTree and Charles Schwab Investment Management (CSIM). 

Today, seven of these providers are adding new funds to Schwab’s commission-free online ETF program. Notably, PIMCO is doubling the amount of ETFs they offer with the addition of three multi-factor products.

“As we approach the five-year anniversary of ETF OneSource, we’re incredibly proud of the growth this program has achieved and that it continues to capture investor interest,” says Heather Fischer, vice president of ETF & mutual fund platforms and client solutions strategy at Charles Schwab. “According to our research, trading ETFs without commissions or other fees continues to grow in importance for investors, so we’re thrilled to continuously expand our selection of ETFs. The fact that ETF providers continue to see value in the program is demonstrated by the ETFs they’ve continued to add to our program.”

The new funds that are available include:

Fund Name

Ticker

Morningstar Category

Xtrackers MSCI All China Equity ETF

CN

China Region

Xtrackers MSCI Germany Hedged Equity ETF

DBGR

Miscellaneous Region

Global X U.S. Preferred ETF

PFFD

Preferred Stock

Guggenheim BulletShares 2025 High Yield Corporate Bond ETF

BSJP

High Yield Bond

Guggenheim BulletShares 2027 Corporate Bond ETF

BSCR

Corporate Bond

IQ Chaikin U.S. Small Cap ETF

CSML

Small Blend

PIMCO RAFI Dynamic Multi-Factor Emerging Markets Equity ETF

MFEM

Diversified Emerging Markets

PIMCO RAFI Dynamic Multi-Factor International Equity ETF

MFDX

Foreign Large Blend

PIMCO RAFI Dynamic Multi-Factor U.S. Equity ETF

MFUS

Large Blend

SPDR® Bloomberg Barclays Emerging Markets Local Bond ETF

EBND

Emerging-Markets Local-Currency Bond

SPDR® EURO STOXX Small Cap ETF

SMEZ

Europe Stock

WisdomTree Emerging Markets ex-State-Owned Enterprises Fund

XSOE

Diversified Emerging Markets


A complete list of Schwab ETF OneSource ETFs is available here.

Participants January 4, 2018

Public Pension Fund Members Largely Unaware of Underfunding

Public pension fund members surveyed expressed interest in more transparency about pension fund investments and investment returns.

Reported by

Although U.S. equities delivered record-setting performance in 2017, the majority of U.S. public pension plans are underfunded, according to a survey by Spectrem Group.

The survey found that 48% of public pension plan members say they are relying on their pension for at least half of their retirement income. Ninety-two percent of members say their pension fund’s ability to generate returns at or above the fund’s target level is important or very important. Among California Public Employees Retirement System (CalPERS) members, this rises to 96%.

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Ninety-three percent of members say it is important or very important that their pension generates returns at or above market level. Among CalPERS members, this is 97%.

Ninety-five percent believe the fund’s ability to effectively manage risk is important or very important.

However, only 56% of those surveyed think they are very well or moderately informed about their investment return. Likewise, only 54% think they are informed about their target return. Sixty percent think they are knowledgeable about the expenses and fees that they pay, and only slightly more, 61%, think they are up to speed on their pension plan’s benefit structure. They are less confident in their knowledge of the costs associated with shareholder activism, the composition and investing experience of the fund’s board and the amount of time spent by fund managers reviewing and voting on shareholder proposals.

Forty percent think their funds have performed in line with the market for the past few years, which Spectrem contends is not always the case. Among NYC Funds, 46% of members have this misconception, and among CalPERS members, the percentage is 42%.

Only 31% of members think their pension is underfunded when, in fact, all of their pensions are underfunded at least to some degree, according to Spectrem. Eighty percent of NYC Funds think their pension is fully funded, but it is only 68% funded.

The survey also suggests public pension fud members are also unaware of how their pension plan’s portfolio is invested. For example, while 20% of CalPERS assets are in high-risk alternative investments, only 14% of the plan’s members think that more than 10% of the fund is invested in such assets.

When asked about fund management, 75% of members think the No. 1 priority should be maximizing returns and getting the pension fully funded. Only 14% want their fund’s managers to make advancing social and political causes the priority.

Spectrem conducted the online survey in November. The full report can be downloaded here.

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