Our weekly roundup of industry highlights
Managers skeptical of projected robo advisor growth
Robo advisors are expected to expand by more than $800 billion over the next five years, according to a report. Digital advice will likely grow to $1 trillion by 2020, according to another.
Managers, however, see these predictions as too optimistic, with over 75% of those surveyed by PwC expecting robos to generate less than $100 billion from ETFs over the next five years. Asset managers are only aware of robo advisors in "a superficial manner, like much of the general public," Aite senior analyst Javier Paz told Bloomberg.
Aite suggests that nearly 17 million investors will be using robo advisors by 2021, a rise of 1.8 million when compared to last year. This could result in a concentration and communication problem that robos, investors, and regulators should keep in mind, Bloomberg noted.
"I see it as good business practice to let clients know when and why a robo platform may experience a trade suspension," Paz said. "This kind of communication should precede a major market event and not be the result of increased regulation."
Insurers struggle with regulatory compliance
The biggest operational challenge to a firm's expansion strategy is addressing local regulation and accounting standards, according to a new survey.
"As global regulatory regimes grow more complex, insurance firms are required to produce more frequent and detailed disclosures on holdings and exposures," SS&C Institutional and Investment Management Senior Vice President Christy Bremner wrote in the firm's 2017 Insurance Asset Management Technology Outlook report.
Firms are also being challenged by the required accounting for an expanding array of non-traditional instruments used to employ new investment strategies, according to the study.
Goldman Sachs expands suite of ETFs
Goldman Sachs Asset Management announced last week that it is expanding its Access Suite of ETFs by launching the Goldman Sachs Access High Yield Corporate Bond ETF (GHYB). The fund, which requires a minimum investment of $1,000, aims to offer low-cost access to high-yield corporate bond markets.
"The Goldman Sachs Access High Yield Corporate Bond ETF seeks to offer investors an innovative approach to access high-yield corporate bonds, with a focus on eliminating underperforming assets to potentially provide a smoother ride and better risk-adjusted returns for investors," GSAM's Global Head of ETF Strategy Michael Crinieri said in a statement.
KraneShares MSCI to list on NYSE
Inspired by Chinese President Xi Jinping's initiative to modernize the original Silk Road trading routes, the KraneShares MSCI One Belt One Road ETF (OBOR) will hold companies from countries across the region participating in the project.
The fund, which has an expense ratio of0.79%, delivers its investment theme through the MSCI Global China Infrastructure Exposure Index, which reflects the performance of companies with high revenue exposure to Chinese infrastructure development under the One Belt One Road initiative.
CBOE Holdings plans options launch on S&P
CBOE plans to launch options on the 10 S&P Select Sector Indices that comprise the S&P 500 in late fourth-quarter 2017 or early 2018, pending regulatory approval, the firm said.
Expected to be exclusively listed on the Chicago exchange, the launch is aimed to provide exposure to widely followed U.S. equity sectors represented in the S&P 500.
DoubleLine appoints head of Latin America and Caribbean
DoubleLine hired Joel Peña, a manager with over a decade of experience, to head the firm's institutional and intermediary investor relations in Latin America and the Caribbean.
Peña will manage relations with overseas clients, advisors and distributors engaging the firm via its U.S. offshore platforms.
"Thanks to economic growth, a broadening middle class and rising standards of living, countries in Central and South America have seen growth in assets entrusted to pension funds, insurers and other fiduciaries," DoubleLine Executive Vice President Ron Redell said in a statement. "These institutional investors are looking beyond their local markets for investment opportunities and expertise."
GoldenTree expands, poaches JPMorgan exec to lead new office
GoldenTree Asset Management hired a 30-year JPMorgan veteran to lead its new office in Sydney, Australia, as the firm looks to continue its expansion in the Asia-Pacific region.
Russell Taylor has held many roles at JPMorgan, but most recently served as the managing director of JPMorgan's Institutional Sales for Australia and New Zealand.
The opening of the Sydney office represents the company's latest expansion in the Asia-Pacific region, following the opening of an office in Singapore three years ago. Sydney is home to a number of GoldenTree's institutional clients.
"Australia has long been an important market for GoldenTree and we are pleased to establish an on-the-ground presence in the region, which we believe will offer significant benefits to our investors," GoldenTree partner and head of business development Kathy Sutherland said in a statement.
Yale professor joins Ariel Investments board
Yale School of Management professor Heather Tookes has been elected to Ariel Investments' board of directors.
Professor Tookes has been on faculty at the Yale School of Management since 2004 and has held a variety of academic posts at the university including Associate Professor of Finance, and Assistant Professor of Finance.
Professor Tookes received her PhD in Finance from Cornell and her BA in Economics from Brown. She is a member of the FINRA Economic Advisory Committee.
"We are delighted to have Professor Tookes join our company board. We know Ariel will benefit greatly from her insights, research and deep knowledge of the financial markets," John Rogers, Jr., Founder, Chairman and CIO of Ariel Investments said in a statement.
Ultimus names VP of legal and compliance
Ultimus Fund Solutions appointed Dina Tantra, a former managing director at Foreside Financial, to vice president and director of fund administration and compliance as the company continues its drive forward and navigate an ever-changing regulatory arena, the firm said.
Tantra has over two decades of experience, with previous experience at Advisers Investment Trust and Beacon Hill Fund Services, according to her LinkedIn account. She will oversee Ultimus' fund administration, fund compliance, and corporate compliance teams.
"As we continue to grow, Dina will be instrumental in overseeing these aspects, along with cultivating a strategic outlook not only for the fund administration and compliance teams, but for the firm as a whole," Ultimus managing director and COO Gary Tenkman said in a statement.
Tantra will report to Tenkman.
Starwood Retail Partners hires CEO
Industry veteran Michael Glimcher will succeed Starwood Retail Partners CEO Scott Wolstein at the head of the real estate investment firm. Wolstein is moving to a new role as senior advisor to Starwood Capital, the firm's parent company, according to Starwood.
"We are pleased to bring on an executive with Michael's deep expertise and high-caliber leadership ability to Starwood Retail Partners' team. His 27 years of comprehensive industry experience and far-reaching relationships position him to step seamlessly into this role," Starwood Capital CEO Barry Sternlicht said in a statement.