Morningstar buys stake in Sustainalytics: News Scan
Our weekly roundup of industry highlights
Morningstar purchases stake in Sustainalytics
Morningstar purchased a 40% ownership stake in Sustainalytics, an ESG research firm.
The purchase is a part of Morningstar's growing effort to provide investors with information about whether or not their portfolios are eco-friendly. Morningstar has sustainability ratings for global mutual and exchange-traded funds and 27 sustainability indexes. The firm's sustainability ratings are already based on Sustainalytics research.
"Enhancing this relationship enables us to leverage the expertise Sustainalytics has built over the last 25 years, and build on the momentum we started with the launch of the sustainability rating," said Morningstar CEO Kunal Kapoor.
Morningstar’s head of sustainability, Steven Smit, will join the Sustainalytics board of directors. The executive team at Sustainalytics has also taken a minority stake in the company, according to Morningstar.
Vanguard tries active in Europe and Asia-Pacific
In its expansion to Europe and Asia-Pacific, Vanguard is pivoting away from its index-tracking products and leaning on new active offerings, according to Bloomberg News.
The $4.4 trillion U.S.-based firm, which began offering new mutual funds in Europe for the first time in nine years last May and listed four active ETFs a few months prior, is taking its low-cost show on the road with plans to undercut some of its rivals in the region by nearly half.
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"We're trying to catch up with what we've already done on the indexing side, to be able to offer low-cost, high-quality, active products to investors on a more global basis," said Greg Davis, the 46-year-old incoming chief investment officer.
Vanguard currently has roughly $275 billion of the company's assets overseas, which equates to less than 10% of its overall assets.
Outflows steadiest since 2009, despite record S&P 500
ETFs reported continuous outflows despite three consecutive weeks of gains at the S&P 500, according to Bloomberg News.
The SPDR S&P 500 Trust, the largest ETF tracking the index, reported $3.8 billion in outflows. It is the fund's fourth consecutive month of redemptions, the longest period of outflows since the bull rally in 2009.
The S&P 500 reached new highs last week before retreating as an ongoing investigation into President Trump raised concern about the potential for a stalled economic agenda.
The benchmark added 0.5%, as the Nasdaq 100 climbed 1.4% and the Dow dropped 0.3%.
In the U.S., traders pulled $2.1 billion from mutual funds and ETFs during the week ending July 12 as $5.1 billion flowed into funds around the world. A recent fund manager survey from Bank of America Merrill Lynch found that U.S. stocks were the most underweight since 2008.
"We've contributed to that because we've been moving money out of large-cap stocks in the U.S.," says Ed Keon, the managing director and portfolio manager at Quantitative Management Associates. "We're not bearish; it's just a question of better growth with lower valuations elsewhere."
GuideStone offers a strategic alternatives fund
GuideStone funds launched a new strategic alternatives product designed to generate returns with lower volatility traditional equity and fixed-income markets, according to the company.
The GuideStone Strategic Alternatives Fund (GFSZX), which has an investment minimum of $1,000 and expense ratio of 1.42%, is built to minimize volatility through reliance on long- and short-term equity, options selling, currency trading and short duration high yield. The fund is an add-on to Guidestone's Defensive Market Strategies Fund for alternative investments.
AST announces equity plan website
Equity solutions provider AST introduced a new website in an effort to streamline transactions and make data more easily accessible to its clients, according to the provider.
Online registration has been simplified and product summaries have been condensed. User manuals and informational videos on how to make different types transactions on the website are available.
AST, which has services that include employee plan services, information agent, mutual fund proxy solicitation, shareholder identification, asset recovery and investment management offerings, launched the website as a part of its company rebranding.
USCF introduces new U.S. oil funds
The asset management firm added two more oil funds to its listings, according to the firm.
The United States 3X Oil Fund (USOU) and United States 3X Short Oil Fund (USOD) have expense ratios of 1.84% and 2.19%, respectively, according to Morningstar.
They are two out of six oil funds the firm offers. Both funds can be traded on the NYSE Arca.
USOU seeks returns of 300% on West Texas Intermediate light, sweet crude oil futures contract and USOD seeks returns of -300% on the WTI light, sweet crude oil futures contract, the firm said.
U.S. equity ETF from ProShares
ETF provider ProShares introduced its first U.S. equity ETF designed outperform traditional large-cap indexes like the S&P 500, according to the provider.
The ProShares Equities for Rising Rates ETF (EQRR), which has an expense ratio of 0.35%, is benchmarked to the Nasdaq U.S. Large Cap Equities for Rising Rates Index and listed on the Nadsaq exchange. It is designed to select five U.S. large-cap stocks in each sector that have most recently demonstrated the highest correlation to weekly changes in 10-year U.S. Treasury yields. Stocks with higher correlations to rising interest rates are more heavily weighted.
Franklin Templeton appoints head of U.S. sales
Franklin Templeton hired a JP Morgan veteran to lead its U.S. institutional sales division, according to the firm.
Tom Fisher is in now charge of creating the firm's sales and client relations strategy. He manages teams in San Mateo, California, New York and across the U.S.
Our commitment to our institutional clients continues to be a top priority for the firm," said Jenny Johnson, president of Franklin Templeton Investments. "This not only includes delivering strong, long-term investment performance and a comprehensive suite of products, but also attracting top talent and leveraging the right people in the right roles to most effectively serve our clients."
Prior to joining Franklin Templeton, Fisher worked at JP Morgan Asset Management for 18 years in sales and consultant strategy.
BlackRock sales executive moves to Vanguard
Vanguard appointed BlackRock's former head of institutional sales to lead of its Mexico division, according to the firm.
The addition of Juan Manuel Hernandez comes as part of Vanguard's efforts to expand its product lines to investors in the region. Vanguard currently offers 65 U.S.-domiciled ETFs cross-listed on the International Quotation System (SIC) of the Bolsa Mexicana de Valores and 26 that have been approved as eligible investments for Mexican Sociedades de Inversion Especializadas para el Retiro (SIEFOREs).
"Many companies talk about their client focus but Vanguard actually lives and breathes it as a result of its mission to take a stand for all investors, treat them fairly, and give them the best chance at investment success," Hernandez said. "It has a global reputation for offering products solely designed to serve investors' needs and goals. Vanguard's desire to deepen its business is a huge win for Mexican investors and I'm honored to have this opportunity to be part of the effort."
Prior to joining BlackRock, Hernandez was the head of sales for iShares Mexico.