Investment Products and Services Launches

Franklin Templeton Investments will introduce its first passive exchange-traded funds (ETFs), with an initial suite of 16 single country and regional market-cap weighted ETFs. These ETFs will be listed on the New York Stock Exchange (NYSE) Arca on Monday, November 6.

These passive ETFs will allow investors to gain exposure to a specific region or country at a low fee. The investment firm says the funds’ expense ratios are among the lowest in the industry for their respective categories, empowering more investors with the ability and options to realize the full potential of beta-driven solutions. The suite consists of ETFs that will target exposures to developed countries at an expense ratio of 0.09% and emerging markets at 0.19%.

“Our goal is to provide investors with the flexibility to construct diversified portfolios across active, smart beta and passive ETF strategies,” says Patrick O’Connor, head of Global ETFs for Franklin Templeton Investments. “Our new suite of passive ETFs will provide a cost-effective way to access beta solutions, further rounding out our offerings for US investors.”

Dina Ting, vice president and senior portfolio manager, and Louis Hsu, vice president and portfolio manager, Global ETFs, will manage the suite of country and regional ETFs, which will include:

The new ETFs will be market cap-weighted and benchmarked to country and regional indices from FTSE Russell, leveraging the global index provider’s capabilities and expertise across developed and emerging markets.

Visit Franklin LibertyShares’ Capital Markets Corner for insights on ETF investing and general information on the firm’s ETFs.

CLS Partners With Five Providers to Launch ETF Models

CLS Investments LLC (CLS) has launched Smart ETF Models, which utilize products from five exchange-traded fund (ETF) providers at a zero-percent strategist fee. CLS partnered with Deutsche Asset Management, First Trust, J.P. Morgan Asset Management, PIMCO and PowerShares by Invesco to offer these models. 

CLS currently offers eight Smart ETF Models, which are globally diversified portfolios composed of smart beta and active ETFs, along with smaller satellite positions in ETFs focused on specific sectors, countries and alternative assets. The Smart ETF Models were designed to focus on total return proportionate to the investor’s risk budget (which can range from conservative to aggressive). They are currently available on Orion Communities (through CLS’s sister company, Orion Advisor Services), Envestnet, FTJ FundChoice and Sawtooth.

“At CLS, we recognize that in our ever-changing industry, offering low-cost solutions that add value to an investor’s portfolio is crucial for an advisory firm’s growth and success,” says CLS CEO Ryan Beach. “We also recognize the positive impact that smart beta and factor investing have on portfolios. While zero-fee models traditionally contain allocations to only one provider or entity, CLS’s Smart ETF Models will provide advisers with a solution that incorporates ETFs from multiple providers and align with the client’s Risk Budget and CLS’s active outlook.”

CLS will manage these models with their disciplined and active Risk Budgeting framework, and will continue to place focus on the global market. The portfolios will also emphasize ETFs based on factors (“smart beta ETFs”) which have historically demonstrated a bias to outpace the market over time.

In addition to its Smart ETF Models, CLS offers additional ETF-focused strategies on platforms that are designed to generate income or accumulate wealth.

“Orion is thrilled to be one of the first to provide our advisers with access to CLS’s disruptive Smart ETF Models in order to meet our clients’ demands and help drive down the cost of asset management,” says Orion CEO Eric Clarke. “CLS’s Smart ETF Models provide advisers with the investment solutions needed to help grow their client’s portfolios in a cost-efficient and strategic way.”

For more information about CLS’s Smart ETF Models or to register for a webinar on November 16 about the new models, visit https://www.clsinvest.com/smartetfmodels/.

PFM Acquires FCM Assets to Include Stable Value Investments Offering

PFM announced an agreement to acquire the assets of Fiduciary Capital Management (FCM) that will allow PFM’s asset management business to expand its services to include “stable value” investments to qualified retirement plans such as 401(k) and 457 plans. The agreement will bring FCM’s expertise and approximately $2.5 billion in managed assets to PFM’s asset management business.

“The FCM team provides a great complement to our current array of asset management services,” says PFM CEO John Bonow. “This planned acquisition adds a unique asset class to our very substantial fixed income business and gives us the opportunity to manage assets in the defined contribution market. PFM and FCM share a conservative, income-oriented investment philosophy that strives for principal preservation.”

David Starr, a PFM managing director and head of PFM’s stable value group will oversee the expanded operation that includes six new employees from FCM.

“By bringing in a team with an accomplished track record and strong skill set in stable value we’ll be able to broaden our offerings to our current client base as well as future clients,” Starr says. “The defined contribution [DC] market has become more and more important in the investment business, given the scope and growth of the asset base there. In order to best serve our clients we felt it was essential to expand our capability in that category.”

FCM, which is currently owned by Ohio National Financial Services, Inc., which provides institutional clients with low-risk, high-performing stable value investment management services. It also offers a spectrum of related services including insurance company credit evaluation, annuity purchases and advisory services incorporating stable value.