Our weekly roundup of industry highlights
Now accepting Top Women in Asset Management Awards nominations
Money Management Executive is welcoming submissions for this year's Top Women in Asset Management Awards. Candidates will need to demonstrate how they have improved their firm's marketing, technology and/or operations, and provide details about involvement in community service or mentorship programs, as well as programs or efforts in providing opportunities to the women of their firm and industry.
To make a nomination, email firstname.lastname@example.org. The deadline to receive submissions this year is April 20.
Surging volatility results in best fund returns of 2018
Unlike bets on calm equity markets for returns in 2017, stocks linked to volatility have provided the best returns for exchange- traded products so far this year, according to Bloomberg.
With the S&P 500 posting its first quarterly slide since 2015, the CBOE Volatility Index rebounded from record lows set last year. The best performers of 2017 that tied inversely to volatility have become the year's worst, losing 91% since January.
The VIX fell 4.4% last week after surging 18% just days before, Bloomberg reports. As a result, Goldman Sachs has warned investors to add protection, saying traders are more exposed to stock swings.
Charity adds fund dedicated to DoubleLine’s Bonnie Baha
Pasadena Community Foundation, a tax-exempt charity, has added the Bonnie Baha Memorial Scholarship Fund into its charitable assets. The fund aims to support women who want to develop their careers in the financial industry.
At least one $10,000 scholarship will be given every year to a woman enrolled in the full-time MBA program at the Marshall Business School of University of Southern California.
Bonnie Baha, who served as a senior portfolio manager and a partner of the asset management firm DoubleLine established the fund to help address the underrepresentation of women in the financial industry. Baha passed away in 2016, at the age 56.
"We are honored to establish a fund in tribute to Bonnie's impressive career, supporting a cause which was dear to her heart," says Jennifer DeVoll, chief executive officer of the Foundation. "Through this scholarship, her legacy of helping women in finance will continue."
More interest in focused strategies: Greenwich Associates
Institutional investors are raising their allocations to so-called focused strategies, or portfolios holding 50 names or fewer, as distributors are increasingly recommending them to clients, according to a study reported on by Bloomberg News.
Due to the continued growth of passive strategies, distributors believe this is the optimal way to deliver performance for both large- and small-cap funds, the report released by Greenwich Associates, in conjunction with Fred Alger Management, found. Of the 91 "key decision makers" surveyed, more than half of the institutional investors said they'd increase their allocations to focused strategies in the previous 18 months, if given the chance, while the same amount expect their interest to grow over the next two years.
"It's indisputable that passive has gained momentum in the marketplace," Jim Tambone, Alger's chief distribution officer, told Bloomberg. "Passive has essentially created a floor for returns. In other words, you must beat passive or you don't survive."
Index-based passive strategies in mutual funds and ETFs have grown to $6.8 trillion from $2.7 trillion five years ago, according to Morningstar.
T. Rowe Price launches multi-strategy total return fund
T. Rowe Price has launched a multi-strategy total return fund (TMSRX for Investor Class shares and TMSSX for I Class shares) that seeks to diversify investment risk and provide capital preservation and consistent returns over time.
TMSRX has an expense ratio of 1.37%, with TMSSX at 1.07%. The fund is a combination of six internally managed liquid alternative strategies.
It's considered an absolute return fund, and the goal is to achieve positive returns over time regardless of market conditions, according to the firm.
The offering could also lower risks during periods of heightened market volatility by capital preservation and consistent returns over time, the firm says.
"We expect each of the fund's underlying components to contribute meaningfully to its performance, so no one component should drive all of the returns," says Stefan Hubrich, co-portfolio manager, director of research, multi-asset division. "We believe that, over time, this diversification will allow us to generate a high level of risk-adjusted performance above the cash benchmark."
Vident Financial offers a multifactor real estate ETF
Vident Financial has launched the PPTY - U.S. Diversified Real Estate ETF (PPTY). The rule-based fund, which has an expense ratio of 0.53%, will diversify investors' exposure in the real estate market based on four factors including location, property type and the analysis of a firm's leverage and governance.
The traditional cap-weighted approach has over 95% of REIT ETF assets. Its portfolio construction process uses data on the individual properties held by each company in the investment universe to build a portfolio based on the four factors, according to the firm.
Grayscale sets up 4 crypto funds to improve liquidity
Grayscale, the firm behind the tradable Bitcoin Investment Trust (GBTC), has launched four new cryptocurrency-related investment funds: Bitcoin Cash Investment Trust, Ethereum Investment Trust, Litecoin Investment Trust and XRP Investment Trust, Investopedia reported.
The funds will cover bitcoin cash, ethereum, litecoin and ripple virtual currencies, respectively. Because the funds operate as trusts, only U.S.-based qualified accredited investors are allowed to invest.
There is a one-year holding period before the investor can exit the funds without any restrictions, according to Investopedia.
"Digital currencies are not like stocks and bonds. There's certain technological prowess that people need to have in order to handle them." Michael Sonnenshein, managing director at Grayscale Investments, told CNBC.
New energy ETF launches to honor T. Boone Pickens
TriLine Index Solutions, a BP Capital Fund Advisors affiliate, announced the launch of a new ETF - NYSE Pickens Oil Response (BOON). The fund honors the leadership of T. Boone Pickens, who crafted the Pickens Plan for American energy.
BOON, which has an expense ratio of 0.85%, tracks the performance of the NYSE Pickens Oil Response Index, owned and administered by ICE Data Indices. The index is composed of equities that correlate to energy, and includes not only traditional energy companies but also energy-intensive firms that have the potential to benefit from U.S. energy and global demand for energy.
The mix is intended to lessen the effect of commodity cycles. The index is equally weighted and reconstitutes annually while rebalancing quarterly.
Vitrus Investment Partners announce new fund
The Virtus KAR Small-Mid Cap Core Fund was introduced by Virtus Investment Partners and affiliated investment manager Kayne Anderson Rudnick. The fund seeks to invest in competitive, high- quality companies and purchase them at attractive valuations.
The fund (VKSIX) has an expense ratio of 1.05%. The strategy for the fund mirrors that of KAR's SMID Core retail separate account, which had $2 billion in AUM as of Dec. 31.
Businesses that are differentiated by above-average returns and trading at attractive valuations are identified using KAR's disciplined investment process.
Portfolio managers expect to invest in 25 to 35 select companies they think are undervalued relative to future growth potential.
BMO reduces fees for 2 U.S. equity funds
Effective Feb. 8, BMO Global Asset Management reduced advisory and total expense ratio cap fees for BMO Large-Cap Growth Fund (MASTX) and BMO Large-Cap Value Fund (MLVIX).
The move reduced the advisory fees by 15 basis points and the total expense ratio cap by 21 basis points.
"We are continuously looking for ways to serve our clients better and offer investors a diverse range of best-in-class products across asset classes and investment styles," says Phil Enochs, head of BMO GAM U.S. "Reducing the fees of our two largest U.S. equity funds demonstrates our commitment to providing our clients with top-performing funds at a great value."
CBOE Vest launches its first ETF
CBOE Vest, the asset management subsidiary of CBOE Global Markets, announced the launch of the CBOE Vest S&P 500 Dividend Aristocrats Target Income ETF (KNG).
The fund, which has an expense ratio of 0.75%, is index-based and tracks the CBOE S&P 500 Dividend Aristocrats Target Income Index Monthly Series (SPATI) that seeks to provide annualized income from stock dividends and option premiums of nearly 3% over the appreciation of the S&P 500, before fees and expenses.
"Investors have been challenged since the global financial crisis to find sources of income without introducing duration and credit risk into their portfolios," says CBOE Vest President Steve Neamtz. "KNG, with its dividend-grower stock selection and covered-call options strategy, offers a novel approach."
DoubleLine appoints chief compliance officer
DoubleLine Capital appointed Pimco's Youse Guia to chief compliance officer of the firm and of the DoubleLine Funds Trust. Guia, who previously served as Pimco's chief compliance officer, succeeds Adam Rossetti in the position.
Rossetti continues at DoubleLine as an attorney in the firm's legal department.
"Youse's depth of management expertise and experience perfectly complement the ongoing diversification of DoubleLine's business into multiple investment strategies and the extension of those product lines into a variety of distribution channels to serve our valued clients in the United States and globally," says DoubleLine CEO Jeffrey Gundlach.
Guia previously served as the head of U.S. compliance for Allianz Global Investors and the chief compliance officer of Allianz Funds, according to DoubleLine. Before that he spent six years as an audit manager with PwC, specializing in the investment management industry.
RBC expands U.S. investment management team
RBC Asset Management named former Rutabaga Capital and MFS Portfolio Manager Robert Henderson as its newest edition to the firm's U.S. investment management team.
"At RBC Global Asset Management, we are committed delivering best-in-class investment solutions, and continually seek out talented professionals to further add to our capabilities," says Lance James, managing director at RBC Global Asset Management. "Rob's deep industry knowledge, along with his demonstrated skills in research and portfolio management, will complement our team's proven strengths."
Henderson will serve as lead portfolio manager for RBC's Mid-Cap Value Strategy, according to the firm. In addition to portfolio management duties, Henderson will provide research analysis to support strategies managed by the firm's Boston-based enterprise team.
Vanguard makes adjustments to fixed-income group
Vanguard made four appointments to its fixed-income group.
Paul Jakubowski, global head of the firm's taxable credit group, will replace Ken Volpert, who is retiring in August, as head of investments in Europe and global head of fixed-income indexing, the firm says.
Volpert joined Vanguard in 1992 and managed the Vanguard Total Bond Market Index Fund from 1992 to 2014.
"Ken was instrumental in the development of Vanguard's global bond index fund lineup, as well as ETF shares for Vanguard's bond index funds," says Vanguard Chief Investment Officer Greg Davis. "He also helped build out our European investment team as Vanguard globalized its investment management function."
Christopher Alwine, currently the head of municipal investments, will fill Jakubowski's previous responsibilities, overseeing the firm's active corporate bond portfolio management and trading teams in the U.S., Europe and Asia-Pacific, according to Vanguard.
Paul Malloy, head of the firm's fixed-income group in Europe, will replace Alwine in leading the $183 billion municipal bond team. Christopher Wrazen, manager of the Vanguard Total International Bond Index Fund (VTIBX), will now manage the firm's bond index group in Europe.
OppenheimerFunds names new chief risk officer
OppenheimerFunds has appointed former Goldman Sachs Managing Director Ahmad Deek to chief risk officer.
Deek, who is based in New York, is now responsible for leading the firm's risk management functions as well as enhancing its corporate governance structure, according to OppenheimerFunds. Deek will report to OppenheimerFunds CEO Art Steinmetz.
"I look forward to joining a firm recognized for creating products and solutions tailored to client needs, and helping to further build out and strengthen its risk management and reporting capabilities," Deek says.
Guggenheim Securities grows its leveraged finance group
Former Bank of America Merrill Lynch Managing Director John Pantalena has joined Guggenheim Securities in an effort by the firm to expand its leveraged finance group.
"John's deep understanding of the leveraged finance markets, particularly in the energy sector, is an important addition to our growing leveraged finance capabilities at Guggenheim," says Guggenheim Co-CEO Mark Van Lith.