Our weekly roundup of industry highlights
Brown Brothers Harriman names fintech head
Brown Brothers Harriman promoted Michael McGovern to the newly created position of head of investor services and fintech offerings, as custodial banks ramp up digital product development in the face of competition.
Previously a managing director and the chief information officer, McGovern will focus on data strategy and client information delivery channels.
The new job will focus on middle-office services like hedge funds, software tech solutions and BBH's Infomediary, a message and connectivity engine that helps clients, their external service providers and internal systems connect simultaneously through a single point.
Rivals BNY Mellon, Northern Trust and State Street have all upgraded their middle-office support offerings, including the expansion of their data management platforms.
Other custody banks, including Charles Schwab, TD Ameritrade, Fidelity Investments and Pershing, have broadened their adviser fintech offerings in the past year, either through internal development, partnerships or M&A.
The nearly 200-year-old Brown Brothers said it wants to help its 250 clients to access, organize, transmit and use data more effectively.
"Mike's experience applying information technology across the borders of front, middle, and back offices is rare and differentiated," Geoffrey Cook, a partner and head of investment operations and technology services, said in a press release. "It's the kind of competence our forward-thinking clients can put to use with today's new and emerging technologies."
Surging interest in bonds boosts Pimco Income Fund
The Pimco Income Fund climbed to $88.9 billion in assets last month, extending its lead as the world's largest actively managed fixed-income fund, according to Bloomberg News.
Investors added a net $2.6 billion in June to the Income Fund (PONAX). The fund had net inflows of $15.6 billion in the first half of this year after $16.9 billion of new investment in all of 2016.
Bond funds have been winning cash amid speculation that U.S. stock prices may be reaching unsustainable levels.
Investors moved more than $17 billion into taxable-bond mutual funds in the four weeks through June 28 while withdrawing about $15 billion from domestic equity funds, according to the Investment Company Institute.
Fixed-income demand helps mutual funds outpace ETFs
U.S. mutual funds outpaced ETFs for the first time since February 2016 by $2.6 billion, according to a study from Cerulli Associates.
Analysts caution that the push may only be temporary driven by the current demand for fixed income.
The monthly net flows for fixed-income U.S. mutual funds remained steady with $29.6 billion for May. In comparison, the net flows for equity U.S. mutual funds were $17.3 billion, according to Morningstar.
The monthly net flows for mutual funds were $35.6 billion for May 2017. For ETFs, the net flows were $33 billion, according to Cerulli Associates.
While mutual funds outpaced ETFs, ETF assets grew 2.2% reaching $2.9 trillion. Mutual fund assets grew 1.7% reaching $13.6 trillion, according to Cerulli Associates.
Taxable bonds had the strongest net flows of $26.5 billion for May. The biggest inflow was at Vanguard with $3.1 billion taking 22.3% of the market share, according to Cerulli Associates.
Virtus offers new ETF
Virtus ETF solutions launched an ETF that does not buy and sell stocks to maintain the portfolio's original asset allocation.
Virtus Enhanced Short U.S. Equity ETF (VESH), tries to outperform the total return of the S&P 500 index by minimizing exposure to large- and mid-cap U.S. equities. It sells future contracts based on how much impact short-term exposure to low performing equities will have on an investor's portfolio.
The fund is recommended for investors who want to reduce the volatility of an equity investment.
T. Rowe Price introduces new retirement fund
The new Retirement Income 2020 fund from T. Rowe Price is tailored for so-to-be retirees who would like to generate additional income from their retirement savings.
While the fund is designed for retirees, dividends are distributed to all of the fund's investors. Monthly dividends are calculated based on the fund's net asset value over a rolling five-year time period.
The income fund is structured identically to T. Rowe Price's standard retirement 2020 fund.
TrimTabs offers globally focused ETF
Trim Tabs added a second free cash flow ETF to its offerings.
The All Cap International Free-Cash-Flow ETF is designed to achieve long-term gains from non-U.S. companies that produce free cash flow. A proprietary algorithm selects from 85 companies in Europe, Asia and Canada that are decreasing share count and have healthy balance sheets.
TrimTabs' first ETF selected domestic companies with strong free cash flow that were cutting back share counts.
WisdomTree launches new smart beta fund
WisdomTree launched a multifactor fund that evaluates value, quality, momentum and low correlation to manage volatility and maintain sector neutrality.
The fund is ideal for investors who can tolerate greater tracking errors to traditional benchmarks for higher returns and lower volatility.
Manning & Napier offering funds for fiduciary rule era
Investment manager Manning & Napier is promoting Collective Investment Trust Funds as a fiduciary rule-friendly product, adding another offering to its stable of 25 CIT funds.
The new CIT fund has a zero revenue share product with a trustee fee of 0.25%. The companies chosen for the fund are selected based their free cash flow yield, dividend yield, dividend sustainability and financial health.
"CITs are an increasingly important part of the fiduciary due diligence process," says Shelby George, the firm's defined contribution practice leader.
Hartford Funds adds wirehouse relations manager
Gina Lombardi joins Hartford Funds' wirehouse strategic relationship management team as a relationship manager, the firm announced.
Lombardi is tasked with building Hartford's relationships with its largest broker-dealer clients. She will be based out of Westfield, New Jersey, reporting to Eric Levinson, the team's head.
Prior to joining the firm, Lombardi worked at Cohen & Steers. She has more than 12 years of sales and relationship management experience.
At Cohen & Steers, Lombardi worked in the independent and wirehouse broker-dealer channel.
Wells Fargo recruits BlackRock executives
Wells Fargo Asset Management recruited two BlackRock heads to its multiasset client solutions group.
At Well Fargo's client solutions office in San Francisco, Kevin Kneafsey and Jonathan Hobbs both do research in portfolio risk management.
Kneafsey is a senior investment strategist. Hobbs is head of U.S. portfolio solutions.
Prior to joining Wells Fargo, Hobbs was co-head of liability driven investment at BlackRock, while Kneafsey was head of research for BlackRock's multiasset team. He also worked as a senior adviser for the Schroders multiasset team before joining Wells Fargo.