Industry Highlights and Trends

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This week's notable news, research and executive moves:

  • SEC Examines Universal Proxy Ballots

The SEC's newly proposed proxy ballots could potentially list eligible nominees on proxy cards in an effort to provide shareholders with the option of splitting votes for a mix of management and shareholder nominees, according to a report from AST Fund Solutions.
While this issue led the discussion at a recent SEC roundtable meeting, some participants also discussed the potential "unintended consequences" of universal proxy ballots, while also shifting towards how to determine which candidates appear on the ballots. There was also some discussion on how to mitigate any issues with the voting system as well as the potential increased risk of over-voting as a result of universal proxy ballots, AST's recap of the discussion noted.

  • Global ETF and ETN Flows Reach Record $50 Billion

Investors are more comfortable with non-U.S. equity and corporate bonds, according to a recent BlackRock report, as global ETP flows in February reached a record $50 billion, the fastest start to any year on record, lifting the year-to-date to $62.3 billion. BlackRock analysts note U.S. stocks rallied as U.S. equity ETP flows, while modest compared to other exposures at $3.9 billion, rebounded after significant recoveries in January.
Fixed income flows also improved to $17.8 billion while emerging markets equity funds stabilized after adding $2.7 billion, breaking a five-month outflow streak, BlackRock says.

Pan-European equity exposures also reached a new monthly high of $8.8 billion as year-to-date flows have exceeded the peak from last year, the report shows. This, BlackRock analysts add, is helped by the ECB bond purchase announcement, but also a potential consequence of a weakening Euro.

With lower oil prices aiding broad emerging markets in China and India funds as well as the accommodative fiscal policies of central banks, emerging markets have also started to stabilize, adding $2.7 billion and breaking a five-month outflow streak, according to the firm.

  • Redemptions Haunt Bill Gross Even at Janus

Moving to Janus hasn't helped Bill Gross escape redemptions from funds under his name and management, Bloomberg reports. Gross's Janus Global Unconstrained Bond Fund suffered its first month of net withdrawals since he joined, with clients pulling $18.5 million from the fund in February, Morningstar estimated. Gross primed the fund last year as assets surged from about $13 million before he joined. More than $700 million of its assets came from Gross himself, according to Richard M. Weil, CEO of Janus in a Jan. 22 conference call. Bloomberg notes Janus disclosed in a regulatory filing earlier this year that Gross and his family held a 51.2% stake in the global unconstrained fund at year-end.
Gross's Janus Global Unconstrained has declined 1.7% in the past three months, lagging behind 96% of peers, according to Morningstar.

  • Global ETP Assets Will Reach $3 Trillion in First Half of 2015

With assets in ETFs/ETPs globally reaching $2.91 trillion at the end of February, research firm ETFGI predicts the global market will pass the $3 trillion milestone in the first half of the year. Globally, there are now 5,632 ETFs/ETPs, with 10,902 listings from 245 providers. ETFGI managing partner Deobrah Fuhr adds iShares gathered the largest net ETF/ETP inflows in February with $19.9 billion, followed by Vanguard with $5.9 billion and SPDR ETFs with $4.3 billion.

  • Vanguard Assigns Senior Leadership Roles

Leadership at Vanguard were tasked with new roles within the firm.
Former principal Karin Risi will now head Vanguard's retail investor group, providing mutual funds, financial planning and wealth management and brokerage services to the firm's individual investor clients, the firm said in a statement.

Since joining Vanguard in 1997, Risi has held numerous leadership roles in the company's retail, institutional and corporate divisions, and worked with financial advisor and institutional clients in its financial advisor services and institutional investor group.

Thomas Rampulla, the former managing director of Vanguard Europe, will now direct Vanguard's financial advisor services division, providing investment services, education and research to more than 1,000 financial advisory firms representing over $1 trillion in assets, the firm said. Rampulla joined Vanguard in 1998 and has worked in Vanguard's financial division, fixed Income Group, and institutional sales and marketing team, according to the release.

The two will join an 11-member team responsible for leading Vanguard and its operations and report directly to Vanguard CEO Bill McNabb.

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