Our weekly roundup of new fund launches.
Across the industry, fund commissions are slashed
Vanguard's constant cost-cutting has prompted a chain reaction among competing fund providers and online brokerages.
Fidelity, Charles Schwab, TD Ameritrade and E-Trade all announced they are also cutting fees.
Vanguard lowered expense ratios for 68 ETFs and mutual funds, including the world's largest funds focused on emerging equities and European stocks, in race to zero with BlackRock.
The Vanguard FTSE Emerging Markets ETF has seen its expense ratio cut by 1 basis point to 14 basis points, the same as BlackRock's iShares Core MSCI Emerging Markets ETF.
Fidelity Investments is lowering online commissions for trading in U.S. stock and ETFs by 38%, to $4.95 from $7.95 a trade, the lowest among large retail brokerages, the firm said. Just 10 hours after the announcement, Charles Schwab revealed that it would match Fidelity and reduce its standard online retail trade commission from $6.95 to $4.95, according to Bloomberg.
TD Ameritrade lowered commissions on standard online retail trading to $6.95, from $9.99 a trade. The lower rate also applies to options trades, though the company maintained its 0.75 cent fee on individual contracts. E-Trade lowered trade commissions to $6.95 as well, adding a $4.95 tier for its most active customers. Options fees will be 50 cents a trade.
‘Biblically responsible’ ETFs exclude the LGBT lifestyle
Inspire Investing is offering a way to pursue value investing with biblically responsible ETFs.
The firm has launched the Inspire Global Hope Large Cap ETF (BLES) and Inspire Small/Mid Cap Impact ETF (ISMD). A third fund — the Inspire Core Bond Impact ETF — is likely to launch in March, completing the trinity. Inspire said it will examine corporate behaviors and invest in securities seen as “alignment with biblical values.”
BLES and ISMD, both with 0.61% expesne ratios, have $22.5 million and $14.7 million in total assets, respectively, according to Morningstar.
Any company that participates in “non-biblical activities”, such as abortion, gambling, alcohol, pornography, the “LGBT lifestyle,” will be excluded from the ETFs, according to the firm.
"Good values and good returns are not mutually exclusive," said Inspire Investing CEO Robert Netzly. "Inspire ETFs allow you to join the growing movement of impact investors supporting worthy causes while maintaining the potential for above average investment returns."
Amazon, which has supported gay marriage, is an example of a firm that would be excluded.
Vanguard senses opportunity in Europe
Vanguard is betting the passive investment model it pioneered in the U.S. is about to take off in Europe, Bloomberg News reports.
The prediction comes as forthcoming regulation is expected to increase the cost of money management in the region. Vanguard expects this will boost passive's share of the European market from 15% to almost a third over the next 10 to 15 years. The expense ratio for Vanguard FTSE Europe ETF, the world's largest ETF invested in European stocks, declined to 10 basis points from 12 to match the fee for the iShares Core MSCI Europe ETF.
Direxion gold fund posts 180% return
Investors seeking refuge from political uncertainty in the U.S. and Europe flooded the Direxion Daily Junior Gold Miners Index Bull 3x Shares (JNUG) fund, which almost tripled in the past two months, according to Bloomberg.
Signals that indicate the Federal Reserve would be slow to raise borrowing costs also added to the surge. The fund, which has a 1.01% expense ratio, soared almost 180% from a 10-month low in December, while the precious metal climbed roughly 10%.
New multi-asset funds from PowerShares
Invesco announced the addition of four PowerShares multi-asset allocation portfolios in an effort to meet the needs of its clients' risk profiles.
The new portfolios each have targeted, pre-defined levels of risk exposure that are designed to match clients' risk profiles, the firm said. Each of the actively-managed portfolios includes exposure to smart beta ETFs.
"Given the increasingly complex markets and varying risk profiles of our clients, we're excited to bring Invesco's broad range of capabilities together in simplified, single ticket solutions," said Jason Bloom, global market strategist at PowerShares by Invesco.
JP Morgan ETFs available on E-Trade
Eight of J.P. Morgan Asset Management’s strategic beta ETFs are now available on E-Trade's platform, the firm announced.
The online brokerage added the JPMorgan Diversified Return Emerging Markets Equity ETF (JPEM), JPMorgan Diversified Return Global Equity ETF (JPGE), JPMorgan Diversified Return International Equity ETF (JPIN), JPMorgan Diversified Return International Currency Hedged ETF (JPIH), JPMorgan Diversified Return U.S. Equity ETF (JPUS), JPMorgan Diversified Return U.S. Mid Cap Equity ETF (JPME), JPMorgan Diversified Return Europe Equity ETF (JPEU) and JPMorgan Diversified Return Europe Currency Hedged ETF (JPEH).
Defensive fund from Parametric
Parametric Portfolio Associates has launched a new defensive equity fund, according to the firm.
The Parametric Volatility Risk Premium Defensive (EIVPX), which has a minimum investment requirement of $50,000, is a total return fund and invests in a base portfolio comprised of an equal mix of U.S. equity securities, cash and cash equivalents, the firm said.
The fund is co-managed by Thomas C. Seto, head of investment management; Thomas B. Lee, managing director of investment strategy and research; and Jay Strohmaier, managing director and senior portfolio manager.
Wilshire launches large cap index
Wilshire expands its index suite by launching the OWLshares ESG-Weighted U.S. Large Cap Index.
The index provides a large U.S. market capitalization benchmark for ESG investing. Created and owned by New Millennium Macro, the product uses Wilshire’s ESG scores to evaluate the performance of approximately 500 U.S. large market capitalization companies.
New alternative mutual fund from Highmore Group Advisors
Highmore Funds announced the addition of Highmore Managed Volatility Instl (HMVZX), an alternative mutual fund.
The fund, which has a minimum investment requirement of $25,000 and $53.3 million in total assets, seeks to generate positive returns over five-year investment cycles with either negative or low correlation to traditional equity investments, according to the firm.
“Protecting capital in negative market environments and staying invested in equities rather than market-timing is the key to successful long-term compounding,” said Dipak Jogia, lead portfolio manager at Highmore Funds. “Many investors underperform broader equity markets by buying at the top and selling the bottom.”
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