Our weekly roundup of industry highlights
Boosted by ETF business, BlackRock nears $6T milestone
BlackRock's bet on ETFs is paying off handsomely, Bloomberg News reports.
The world's largest asset manager pulled in $52 billion in its iShares ETF business in the third quarter, helping the firm exceed analysts' revenue estimates for the first time in four quarters.
BlackRock's total assets under management surged to almost $6 trillion.
"We are looking at technology to enable much greater flows," said CEO Laurence Fink. "The greatest component of future technology is to be better connected with clients, to have more technology enabled sales."
BlackRock is also aiming to increase revenue faster than operating expenses, Fink said. In the third quarter, revenue increased 14% from a year earlier while operating expenses increased 13%, according to data compiled by Bloomberg.
State Street shores up wealth management sales team
Coming off its best year since 2008, State Street's asset management business, State Street Global Advisors, is realigning its U.S. SPDR Wealth Management Sales Team to better support the needs of its financial advisor and wealth management professional clients.
"The industry is shifting, and we must customize our client experience and provide a portfolio of resources focused on the drivers, opportunities and challenges investment professionals face in their practice," stated Nick Good, co-head of the Global SPDR business at SSGA. "This reorganization allows us to deliver a higher level of personalized service and support to the growing universe of financial advisors and wealth managers relying on ETFs to meet their clients' goals."
State Street Global Advisors' U.S. SPDR Wealth Management was created in 2001 to serve a broad range of clients; the group represents $330 billion in U.S. SPDR AUM.
Foreign firms flock to China seeking growth
China is proving too hard to ignore for a handful of foreign fund providers eager to tap into growing investor demand, Cerulli Associates reports.
Mutual fund assets under management grew by 12% over the first half of the year, topping $1.5 trillion, while private funds grew 20% in the same period to reach $1.4 trillion.
Foreign firms are now lining up to offer funds in China. Cerulli reports that since the first investment management wholly foreign-owned enterprise license was granted in 2015 to Aberdeen Asset Management, the number of investment or asset management enterprise license holders has expanded to 22 as of September.
Fidelity Investment Management was the first WFOE in China to register with the Asset Management Association of China as a private securities fund manager this January, and was followed by UBS Asset Management, Man Group, and Fullerton Fund Management in September.
"We believe the registration process will be smoother for managers now given the four successful cases." says Miao Hui, senior analyst with Cerulli, who leads the China research initiative.
Charles Schwab launches low-cost index ETF
Charles Schwab's asset management arm launched the Schwab 1000 Index ETF, which aims to provide exposure to the potential growth of the largest 1,000 stocks in the U.S.
A mix of U.S. large and mid-cap stocks, the ETF began trading on Oct. 11 under the ticker SCHK. It carries annual expenses of five basis points, half the cost of the cheapest rival fund, the SPDR Russell 1000 ETF (ONEK).
"Index investing is a fantastic way to build the core holdings of an investment portfolio," states Schwab founder and Chairman Charles Schwab.
Nuveen unveils aggregate bond ETF
Nuveen is expanding its suite of ESG ETFs with the launch of NuShares ESG U.S. Aggregate bond ETF.
The new ETF is designed to offer exposure to the U.S. investment grade, taxable fixed-income market, while sticking with specific environmental, social and governance principles. The ETF began trading on the NYSE on Oct. 2, under the ticker NUBD, and has total expenses of 0.20%.
"We are pleased to offer investors the opportunity to build a full asset allocation portfolio that incorporates RI principles and helps to align their full portfolio with their values in a transparent, tax-efficient and low-cost solution," stated Martin Kremenstein, senior managing director and head of ETFs at Nuveen.
VanEck joins Ned Davis in new ETF offering
VanEck launched a new fund with a guided allocation approach designed to help manage risk in the U.S. equity market.
The VanEck Vectors NDR CMG Long/Flat Allocation ETF (LFEQ) looks to track the Ned Davis Research CMG Large Cap Long/Flat Index, a rules-based index that follows a proprietary model developed by NDR and CMG Capital Management Group. The fund has 0.59% in expenses.
"Our guided allocation solutions are designed to help fill an important need in investors' portfolios by responding to market downturns," Ed Lopez, head of ETF product management at VanEck, stated. "We are excited to again partner with the team at Ned Davis Research and bring this strategy to market."
Lazard Asset Management offers equity franchise fund
Lazard Asset Management launched the Lazard Equity Franchise portfolio, seeking long-term returns by investing in companies that share a combination of a history of stable financial returns, strong earnings forecastability and sustainable competitive advantages.
"We believe investing in a concentrated portfolio of companies with a history of predictable earnings and sustainable competitive advantages offers the potential for strong returns with lower volatility over the long term," stated Matthew Landy, portfolio manager of the Lazard Equity Franchise Portfolio.
New York Life names MainStay Funds president
New York Life's global asset management business appointed its chief operating officer, Kirk Lehneis, as president of its MainStay Funds. Lehneis takes on this role in addition to his COO title.
Lehneis' appointment comes as the firm looks to strengthen its mutual fund product offering.
"Over his career, Kirk has proven to be an able steward for our investing shareholders, and has made significant contributions to the company's success. We look forward to his leadership in developing and expanding MainStay's lineup of mutual funds," NYLIM CEO Yie-Hsin Hung stated.
Guggenheim appoints leveraged loans director
Guggenheim Securities, the investment banking and capital markets division of Guggenheim Partners, appointed former River Birch Capital president Jim Seery as senior managing director focused on leveraged loans and high-yield credit markets.
"As we continue to build out our credit platform, Jim's strong client relationships and deep industry knowledge will augment the firm's capabilities in the client-facing secondary market, as well as our origination platform. We are excited to welcome him to Guggenheim," Jerry Donini, co-CEO of Guggenheim Securities, stated.
Jensen Investment adds 2 managing directors
Jensen Investment Management expanded its board of directors by appointing two new managing directors, Allen Bond and Gabriel Goddard.
Bond joined Jensen in 2007. In addition to his new role on the board of directors, he serves as vice chairman of the Jensen investment committee.
Goddard joined Jensen in 2012. As chief compliance officer, Goddard heads the firm's compliance program and offers counsel to the firm and its staff.