Our weekly roundup of industry highlights
Majority of mutual funds underperformed over 10 years
Nearly 80% of mutual fund managers and institutional accounts underperformed the S&P 500 on a net-of-fees basis over a 10-year horizon, according to S&P Dow Jones Indices.
On a gross-of-fees basis, 68.2% of large-cap mutual funds and 69.2% of institutional accounts underperformed their benchmark, the firm reported in its second annual institutional scorecard. Large-cap equities were the only group of funds that outperformed their respective benchmark on a gross-of-fees basis, according to the report.
"Value managers received a boost against their benchmark as these managers became more diluted in their value exposure and less subject to the risk factors associated with the style," said Ryan Poirier, an S&P Dow Jones Indices senior analyst.
Fixed income results were mixed. Institutional managers in mortgage-backed securities, investment-grade corporate bonds and global credit outperformed their respective benchmarks. About 73% of municipal bond mutual fund managers underperformed on a net-of-fees basis, the report shows.
TABB Group opens U.K. office to meet advisory demand
TABB Group, a global markets and financial technology research and consulting firm, opened a new office in London.
The firm said its expansion is a result of growing demand for advisory on the Markets in Financial Instruments Directive II.
"Our impressive European growth is a direct result of the fact that securities and investment firms recognize they need superior advisory services in the era of MiFID II," said Monica Summerville, the head of European research at TABB Group.
BlackRock slashes fees for 3 socially responsible ETFs
BlackRock cut fees by as much as 20 basis points for three of its socially responsible ETFs, according to Bloomberg.
The funds totaled nearly $204 million in assets, the SEC reported. In addition, BlackRock also made reductions by nearly 2 basis points to eight bond ETFs. The 11 funds combined have $4 billion in AUM.
"As previously outlined, we are purposefully leveraging the benefits of our global scale and investing in our business to deliver value to clients and shareholders," said Melissa Garville, a spokeswoman at BlackRock.
Nikko acquires minority stake in ARK Investment
Nikko Asset Management purchased a minority stake in ARK Investment Management, the firm said.
Through the acquisition, Nikko, one of Asia's largest asset managers worth $182.7 billion, gained exclusive rights to sell ARK products and investment services in Japan and Asia Pacific, according to the firm.
ARK CEO Catherine D. Wood continues to own a majority stake in ARK and ARK's strategic partner, Resolute Investment Manager, still owns a minority stake.
USA Financial Exchange adds $4.5B platform managers
USA Financial Exchange added Horizon Investments and Flexible Plan Investments, both of which are worth a combined $4.5 billion, to its roster of managers in its turnkey asset management program, the company said.
The program offers dozen of managers, including BTS Asset Management, Q3 Asset Management and Symmetry Partners through a single management platform, the firm said. The new platforms include income-based solutions, as well as socially responsible and faith-based strategies.
Vanguard robo reaches new heights
Vanguard's hybrid advice offering, Personal Advisor Services, topped $83 billion in AUM.
The robo has maintained its asset lead over other digital offerings like Betterment and Personal Capital. Since the first quarter, the platform's assets have experienced a 66% growth increase.
Personal Adviser Services, which saw no paid advertising support even during its pilot phase, rose from $755 million in 2013 to $10.1 billion at the time of its launch in 2015.
Saturna Capital offers clean shares from 2 Sextant funds
Saturna Capital launched Z class shares for its Sextant Growth (SGZFX) and Sextant International (SIFZX) funds, the firm said.
The new offerings have no sales loads and distribution or service fees, according to the firm.
"Our clean shares offering is intended to meet the growing demand for lower costs and fee transparency in the mutual fund industry," said Saturna Capital CEO Jane Carten.
The Sextant funds were the last of Saturna's mutual funds to add clean share options.
Vanguard plans benchmark changes for bond funds, ETFs
Vanguard announced efforts to change the target benchmark for three government bond index funds and ETFs to pure Treasury indexes.
The funds will be renamed to indicate the change and will be implemented in this year's fourth quarter, the firm said.
"The funds will offer investors pure exposure to discrete segments of the U.S. Treasury market and provide them the flexibility to tailor their bond portfolios to reflect their risk and return objectives," said Vanguard Chief Investment Officer Greg Davis.
ING, Bloomberg offer global emerging market FX indices
ING is launching an emerging markets index, according to the company.
The Bloomberg ING Global Emerging Markets FX Indices allow users to track the performance 12 equally weighted currencies against the U.S. dollar.
The indexes, which Bloomberg is in charge of gathering and computing data for, are available in long-only and long-short versions, the company said. The long-short version increases returns with a volatility risk filter.
Brown Advisory introduces sustainable bond fund
Brown Advisory launched a fund with risk-adjusted returns that are influenced by environmental, social and governance research, the firm said.
The Brown Advisory Sustainable Bond Fund (BASBX) is the fifth sustainable investment strategies to be released by the $56 billion independent advisory firm, according to the firm. It has an expense ratio of 0.61%.
AndCo Consulting appoints former Graystone director
AndCo Consulting, an independent, employee-owned institutional investment consulting firm, appointed Mike Holycross, a former executive director from Graystone Consulting, to senior consultant in the company's Southfield, Michigan office, the firm said.
Holycross will work with AndCo's team to expand in the region and service its institutional plans, including public, Taft-Hartley, endowment and foundations and corporate plans.
"I decided to join the AndCo team because I wanted to work for an independent firm that allowed me to focus on my clients without internal or external distractions," Holycross said.
CUNA Mutual Group hires 2 wealth management executives
CUNA Mutual Group hired former LPL Vice President Rob Comfort as president of the firm, and Martin Powell, previously a senior account manager with Lincoln Financial Group, as vice president for its wealth management division, CUNA Brokerage Services, the firm said.
In his new role, Comfort is responsible for sales and growing the number of advisors in its network. Powell will lead distribution for CUNA's annuity products.
"We continue to innovate and grow to provide products and services that help people build financial security in retirement," says David Sweitzer, CUNA Mutual Group's senior vice president.