Our weekly roundup of industry highlights
Deutsche Asset Management pays shareholders ahead of IPO
The investment management unit at Deutsche Bank is winning over investors through dividend payouts, Bloomberg reports. The firm will pay out most of its earnings to investors ahead of the asset manager's planned IPO in 2018.
Deutsche Asset Management will take on the DWS brand name, which it currently uses in Germany, to signal independence from the parent company. The unit will also assume a new structure under German law to prepare for the sale, according to Bloomberg.
The firm's asset management division expects annual net inflows of 3% to 5% of AUM in the medium term. Total assets were down to $839.2 billion, from $844.1 billion the year before. Insiders expect to see a 25% sale of the unit for around $2.3 billion, the report said.
RESEARCH
ETF expense ratio most important selecting factor: Survey
Advisors and institutional investors say the expense ratio is the most important factor when selecting an ETF, according to a survey. Nearly two-thirds of those surveyed say cost is "very important," putting price sensitivity ahead of nine other criteria. Expense ratio came in second last year and third the year prior, according to the annual Brown Brothers Harriman and ETF.com report.
The survey of 360 advisors and institutional investors also found that interest in ETFs that implement ESG strategies grew to 51% from 37% last year. Actively managed ETFs also gained in popularity, particularly in the emerging market sector. Meanwhile, investor sentiment soured on actively managed fixed-income ETFs.
"The survey results also point to increasing demand for emerging ETF strategies and an opportunity for established and emerging ETF managers to launch new, differentiated products," Shawn McNinch, global head of ETF services at BBH, said.
PRODUCTS
Vanguard expands active fixed-income lineup
In an effort to grow its active fixed-income roster in the U.S., Vanguard announced the launch of its Emerging Markets Bond Fund.
The fund, which seeks to outperform the JPMorgan EMBI Global Diversified Index with a focus on emerging market countries whose economies and capital markets are less developed, is available in Investor (VEMBX) and Admiral (VEGBX) shares. Expense ratios are 0.60% and 0.45%, respectively.
"Emerging market debt is a well-established asset class offering credit exposure and diversification that is complementary to corporate and high-yield bonds," said John Hollyer, global head of Vanguard's fixed-income unit. "The fund provides investors with low-cost, broad exposure to emerging fixed-income markets."
Hennessy Advisors acquires 2 Ranier funds
Investment manager Hennessy Advisors has finalized a deal to acquire assets in two funds from Ranier Investment Management. The offerings will be folded into the Hennessy Cornerstone Large Growth Fund (HFLGX) and the Hennessy Cornerstone Mid Cap 30 Fund (HFMDX), both of which have investment minimums of $2,500. Expense ratios are 1.26% and 1.35%, respectively.
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These three bellwethers offer insight into the forces that will shape the investing landscape in the decade to come.
December 7 -
Although bigger may be better for the fund giants, passive strategies may be blurring the inherent value of securities.
December 4 -
Analysts are worried that flows to passive funds may create lockstep moves between shares, distorting the market.
November 29
The acquisition of $122 million in assets brings Hennessy's AUM close to $7 billion. Ranier's Small/Mid Cap Equity Fund (RIMSX), its last U.S. fund, could likewise fall under Hennessy's management in early 2018, pending a vote by shareholders later this month.
BNY Mellon launches multi-asset fund
A multi-asset fund from BNY Mellon Investment Management will incorporate a range of asset classes and strategies, the firm said. The Insight Broad Opportunities Fund (DIOIX) will include count equities, fixed income, currencies, real estate, infrastructure and commodities among its assets, and will invest in developed and emerging markets.
Pareto Investment Management, a subsidiary of Insight Investments, will serve as the fund's subadvisor. The multi-asset fund "is designed to adapt to changing market conditions while providing investors with a portfolio that seeks to capture return and manage volatility," said Matthew Merritt, head of the multi-asset strategy group at Insight Investment.
JPMorgan issues event-driven alternative beta ETF
JPMorgan Asset Management has issued a new alternative beta ETF that aims to find mispricing around corporate events such as earnings reports and M&A activity.
To add insult to injury, these returns didn’t even come cheap. The average expense ratio was more than 1%.
The JPMorgan Event Driven ETF (JPED) is headed by Dr. Yazann Romahi, CIO of Quantitative Beta Strategies at JPMorgan Asset Management. The fund is the firm's first alternative beta single-strategy ETF, and its 19th ETF. The firm's ETFs manage $2 billion in assets.
ARRIVALS
American Portfolio names new VP of asset management
Cliff Walsh has joined American Portfolios Financial Services to lead the firm's Nine Points Investment Management (NPIM) portfolios, as well as the research team behind its RIA business.
Walsh began his career in 1999 and was most recently the chief investment officer at Progressive Advisory Solutions. NPIM creates portfolios for the broker-dealer's advisor network and currently holds more than $100 million in client assets. The division recently launched a series of impact portfolios that adhere to ESG conditions.
Edelman Financial shakes up corner office leadership
Edelman Financial Services has named a new chief financial officer and head of development to lead an expansion drive, the firm said. Rene Chaze joined as chief development officer, a newly created position within the 30-year-old company. Jon Isaacson will oversee Edelman's accounting operations as CFO.
Chaze, previously Edelman's CFO, was appointed "to further expand the avenues by which Edelman Financial Services can serve the needs of clients through our unique combination of education, advice, investments and service," said Edelman CEO Ryan Parker.
Before Edelman, Isaacson was American Capital's managing director of buyouts.
American Century appoints head of ETF implementation
BlackRock's former head of iShares broker-dealer execution, Matt Lewis, has been appointed to head of ETF implementation and capital markets at American Century Investments, the firm said.
In his new role, Lewis will be responsible for managing the firm's relationships with ETF liquidity providers and external ETF participants.
"Matt's vast ETF experience and proven strategic, product development, capital markets and operational leadership skills make him a perfect fit for our ETF team," said Ed Rosenberg, senior vice president and head of ETFs for American Century.
Lewis began his career with Barclays Global Investors in 1996, where he was responsible for portfolio accounting, client order management, operations, client service and product management.
Pamela Carter joins Broadridge board of directors
Broadridge Financial Solutions shareholders voted to elect former Cummins Distribution Business President Pamela Carter to its board of directors.
Carter also serves on the board at Hewlett Packard, CSX and Spectra Energy, the firm said.
Carter gained renown while serving as attorney general for the state of Indiana from 1993 to 1997. She was the first female African American to hold that position in any state.
Carter later pursued a business career that ended with her retirement from diesel engine manufacturer Cummins in 2015.
