Our weekly roundup of industry highlights
Bloomberg to provide muni pricing for Neuberger Berman
Investment manager Neuberger Berman chose Bloomberg to provide end-of-day pricing for municipal bonds in its mutual funds, Bloomberg said. Bloomberg's evaluated pricing service (BVAL) currently prices 1 million municipal bonds, which are updated three times per day.
BVAL is "uniquely positioned to help Neuberger Berman accurately track its fund's relative performance versus the market standard benchmark," Varun Pawar, global head of BVAL, said in a statement. The pricing service employs a team of municipal bond experts to monitor data models that track prices.
Vanguard to launch its first actively managed ETFs in U.S.
Vanguard will launch its first domestic actively managed ETFs, according to Bloomberg. These will be the first offered by the firm in the U.S. since its inception.
Vanguard's five factor-based ETFs will focus on minimum volatility, value, momentum, liquidity and quality factors. Vanguard will also issue a multifactor ETF and a multifactor mutual fund.
Expense ratios are expected to be 0.13% for the single-factor ETFs and 0.18% for the multifactor funds.
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The company is evaluating ways to package both its quantitative and active strategies into the funds, according to a person familiar with the matter.
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To encourage a budding relationship with younger clients, firms must provide new offerings and more guidance about how to invest, Schwab says.
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Clients will flock to digital advice, but conditions favor incumbent firms, a study found.
September 18
Smart beta investing had long been a source of debate within the company, which is known for its passive offerings. CIO Greg Davis portrayed the factor-based funds as aligned with the company's core values. "With Vanguard's actively managed, rules-based approach to factors, investors can now harness well-known factor exposure in a more transparent and low-cost way," he said in a statement.
Stephens selects SEI to provide middle-office platform
Stephens Investment Management has handpicked SEI's middle-office platform for its institutional and high-net-worth accounts. SEI's platform aggregates data into a centralized dashboard with the goal of reducing risk and costs. The company will also provide a range of trade processing functions. Stephens specializes in small- and mid-cap equity investing for a range of institutional clients.
"We selected SEI because we needed an operating platform that offers state-of-the-art technologies, customized workflows and proven operational processes to give us more transparency into our clients' portfolios," said Michael Nolte, COO of Stephens.
RESEARCH
Multi-asset classes are reshaping active management
Asset managers are driving the development of multi-asset products in an effort to redefine active management, according to research. In doing so, they're moving away from style-box ETFs and replacing them with multi-asset products that have risk-based allocations, research firm Cerulli said.
In the next year, Cerulli expects around a quarter of multi-asset-class product development plans to center on these kinds of products. The trend could represent an opportunity for strategic beta providers, especially those focused on managed volatility products, according to the firm.
Advisors seek education in SRI
Managers are tasked with educating advisors in socially responsible investing, according to a new report.
Eighty-four percent of advisors say clients are interested in SRI but only a third of them feel informed, according to the latest Eaton Vance Advisor Top-of-Mind Index (ATOMIX) survey.
The survey also found that younger advisors tend to have a more optimistic market outlook than their older counterparts. Clients, for their part, are split: 42% are wary and 39% are optimistic, according to the survey of 1,000 advisors. Ongoing political uncertainty "has created a sense of uneasiness even during a period of steady economic growth," said John Moninger, managing director of retail sales at Eaton Vance.
PRODUCTS
U.S. Charitable Gift Trust expands responsible investing options
As investments in donor-advised funds grow, so do the options. U.S. Charitable Gift Trust has added three responsible investing products from Calvert Research and Management to its lineup of options in donor-advised funds. The responsible- investing funds are separated into conservative, moderate and growth strategies.
These eye-popping returns didn’t come cheap. Expense ratios averaged more than 1% and went as high as 158 basis points.
SRI and donor-advised funds have expanded recently, and 93% of advisors now say they discuss charitable giving with clients, Eaton Vance reports.
Advisor Asset Management to enter ETF space
Advisor Asset Management (AAM) will introduce two ETFs for income investors, making it the latest manager to enter the rapidly expanding arena. The manager's two high-dividend value ETFs target large-cap U.S. equities and emerging markets. Both funds seek out stocks that offer dividend yield and free cash flow.
"There has been massive growth within the ETF industry, and we are excited to be part of the ETF landscape," said Andrew Williams, president of AAM. In the past, the 35-year-old company has specialized in mutual funds, unit investment trusts, separately managed accounts and structured products.
ARRIVALS
Vanguard shakes up management of top funds
Vanguard appointed two new managers to help lead some of its largest and oldest index funds.
Michelle Louie, who joined the firm in 2010, was tapped to become co-portfolio manager of the $367.5 billion Vanguard 500 Index Fund. Louie will also co-manage nine other funds. Christine Franquin will be co-portfolio manager of the firm's $315.6 billion Total International Stock Index Fund.
Vanguard also named five other portfolio managers. Collectively, the new appointees will help oversee 23 equity index funds.
J O Hambro beefs up multi-asset team, launches income fund
J O Hambro Capital Management has built up its multi-asset team with the recent addition of senior fund manager Robert Hordon and investment analysts Rémy Gicquel and Hugues Le Bras. The five-person team is led by Giorgio Caputo and also includes Lale Topcuoglu as head of credit.
The team has launched the JOHCM Global Income Builder Fund (JOBIX), which seeks out income and capital growth. Caputo's group - which joins JOHCM's roster of 15 teams - invests across asset classes and cites protection of capital as a major goal.
Frank Sottosanti to lead marketing for Transamerica
Transamerica welcomed Protective Life's Frank Sottosanti as its new chief marketing officer, a role that involves overseeing marketing and branding across the firm, including its asset management division.
Sottosanti has been tasked with applying his 20 years of experience to leading "innovative and transformational brand and digital platform initiatives that we have in development to enhance our customer, advisor and employer experiences," said Dave Paulsen, executive vice president and chief distribution officer for Transamerica.
Sottosanti was with insurer Protect Life for the past five years, and worked for BBVA Compass, Wachovia Bank and Bank of America prior to that.
American Century hires ex-BlackRock exec ahead of ETF launch
Matt Lewis, a former BlackRock ETF executive, has been named vice president and head of ETFs at American Century Investments.
The move comes as American Century gears up to launch a suite of exchange-traded products in 2018.
Lewis previously worked in BlackRock's iShares group, and will report to senior vice president and head of ETFs Ed Rosenburg, who was hired in June.
The team will spearhead the $171 billion firm's ETF expansion, pending regulatory approval. American Century recently filed a pair of transparent ETFs and licensed Precidian Investments' ActiveSharesSM methodology.
