Our monthly roundup of industry highlights
Vanguard lowers cost to 38 index funds
Vanguard is lowering the minimum investment requirement for 1.5 million of its Admiral Shares clients. The new minimum is shrinking from $10,000 to $3,000 — affecting 38 index funds.
The firm anticipates this change to save clients approximately $71 million, based on current total assets, according to the firm.
"Our unique, client-owned structure enables us to consistently pass along economies of scale and lower the cost of investing for our clients, so they keep more of their returns," said Vanguard CEO Tim Buckley.
Vanguard says the lowered minimums will save clients anywhere from 15% to 71% in fees, depending on the fund.
GAM scandal sees manager lose $4.5B in recent weeks
Investors have pulled at least $4.5 billion from funds at GAM Holdings since the end of September, a sign that the damage from the suspension of a top manager is not over, according to Bloomberg News.
Withdrawals have persisted in the seven weeks through Nov. 16, during which the Swiss asset manager parted ways with CEO Alex Friedman and began a restructuring plan. Those outflows are from strategies unrelated to the original scandal.
The company is offering a special retention bonus to key fund managers, people with knowledge of the matter said earlier this month.
RESEARCH
ETFs could be next active management vehicle
ETFs have the potential to be used in active management, according to a new study.
"It is important to note that most new issuers prefer to leverage their — or by extension, their subadvisor's — active management capabilities and deliver active or strategic beta ETFs," says Matt Merritt, an associate analyst at Cerulli Associates, which directed the study.
There are approximately $3.7 trillion of assets invested in ETFs, at a growth rate of 141% from 2013 to 2018, according to the Cerulli Associates study.
Subadvised ETF assets have grown by almost 95% since 2013, and the number of subadvised products available doubled in that same time period, as of year-end 2017.
PRODUCTS
Ark Investment Management plans fintech ETF
Ark Investment Management, which currently runs the two top-performing ETFs over the past three years, announced plans to launch a new ETF focused on fintech, according to Bloomberg News.
The Ark Fintech Innovation ETF, which plans to charge $7.50 for every $1,000 invested, will invest in companies that aim to change the way the financial sector operates, the regulatory filing says. Ark currently manages a similar fund in Japan, where the firm is a subadvisor for various mutual funds from Nikko Asset Management.
Although fees for the new fund are significantly higher than the $5.76 for every $1,000 charged by the average thematic fund, the similarly priced Ark Web x.O ETF (ARKW), which has a 0.75% expense ratio, returned more than all other unleveraged funds, gaining 34% over the past three years, Bloomberg News reports.
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The firm's success bucks a long-held premise that investing in developing markets requires active managers responding to sudden shifts in political risk.
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New research has found that funds with a high percentage of assets in ETFs underperform funds that hold stocks.
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The Ark Innovation ETF (ARKK), which has a 0.75% expense ratio, is the second-highest ranked, with a 30% return over the same period.
Vanguard launches global credit bond fund
Vanguard expanded its active fixed-income lineup with the Vanguard Global Credit Bond Fund, the firm said.
The new fund, managed by Daniel Shaykevich and Samuel C. Martinez, is composed of 65% U.S. dollar-denominated and 35% non-U.S. dollar-denominated — developed and emerging markets — investment grade securities, including stocks issued by corporate and noncorporate credit entities, the firm said.
"Vanguard has long been recognized as a fixed-income leader, offering investors a comprehensive range of bond funds and ETFs covering corporate, government and municipal markets of varying maturities," said John Hollyer, global head of Vanguard's fixed-income group.
Robo advisor Elm Partners unveils global all-equity program
Robo advisors Elm Partners introduced a global all-equity investment program to its SMA offerings, according to the firm.
The new program has a baseline of 100% global equities, while the existing Global Balanced program has a baseline of 75% global equities and 25% fixed income, according to the firm.
Many sectors have rallied the past decade, but tech and health care outperformed.
The all-equity portfolio will be managed algorithmically with an asset allocation driven by value and momentum, according to the firm, and it will use low-cost ETFs and index funds to build client portfolios. The investment program will charge a fee of 0.12% per year, and will aim to be fully invested in global equities.
Touchstone Investments announces two anti-benchmark funds
Touchstone Investments announced two new funds centered on active management and benchmark differentiation.
Touchstone Anti-Benchmark U.S. Core Equity Fund (TABYX) and Touchstone Anti-Benchmark International Core Equity Fund (TIABX) both utilize TOBAM Core Investments as a sub-advisor, which seeks to enhance diversification and improve risk-adjusted returns on portfolios.
"TOBAM's patented strategy is designed to provide investors with diversified core exposure," Steven Graziano, president of Touchstone Investments, said in a statement.
The funds have expense ratios of 0.54% and 0.59%, respectively.
ARRIVALS
Transamerica hires head of innovation
Transamerica hired Timothy Jones as the company's head of innovation.
Jones will be responsible for driving growth through by developing new uses for technology, and he will report to David Hopewell, the chief data and innovation officer.
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Before his arrival, Jones founded TBJ Investments, according to his LinkedIn profile. He also served as a Presidential Innovation Fellow for the White House and U.S. Department of Energy, according to Transamerica.
Legg Mason appoints director of business development in Chile
Legg Mason appointed Javier F. Brstilo, the former head of institutional sales with BCI Corredor de Bolsa, to director of business development in Santiago, Chile, the firm said.
Brstilo, who has nearly 20 years of experience in Latin American asset management, is responsible for distribution of the firm's capabilities in Uruguay and Argentina, as well as for the institutional market in Chile, according to Legg Mason.
"Hiring Javier further strengthens our commitment to clients in the Southern Cone," said Lars Jensen, Legg Mason's Head of Americas International. "He brings a wealth of knowledge to the role, which will enhance our relationships as we continue to partner with our clients."
RBC names head of U.S intermediary sales
RBC Global Asset Management hired Dave Eikenberg as head of U.S. intermediary sales. Before taking his new position, Eikenberg was senior manager for T. Rowe Price's retirement solutions business.
In his new role, Eikenberg will be responsible for developing and executing sales initiatives toward wealth management firms, defined contribution platforms, sub-advisory, private banks, TAMPS, Bank Trust and RIAs, according to the firm.
Eikenberg will be located in Boston and report to Jeff Masom, global head of Institutional Distribution, according to RBC.
State Street makes internal marketing appointments
State Street Global Advisors has appointed Jet Lali, the former head of SPDR marketing for Europe, the Middle East and Africa, and Asia Pacific, to chief digital officer, according to the firm.
Lali joined State Street from UBS where he served as head of marketing for EMEA and the firm's global digital marketing divisions. Before that, Lali held leadership roles at BlackRock, JPMorgan and Barclays.
"Building a best-in-class digital platform is key to our goal of transforming the way we engage clients and prospects with our investment insights, perspectives and performance," said Stephen Tisdalle, chief marketing officer of the firm.
State Street also named Sarah Estwick, the former head of SPDR digital marketing for EMEA and APAC, to head of North America marketing. Sarah Higgins, head of public relations for SPDR ETFs in EMEA, will now oversee SPDR marketing for EMEA and APAC.
