Our monthly roundup of industry highlights
BNY to rebrand Dreyfus business
BNY Mellon Investment Management announced plans to rebrand Dreyfus. Following the changes, "Dreyfus" branding attached to 94 of the firm's long-term mutual funds, with a combined $63 billion in assets, will now be replaced with BNY Mellon, according to the firm.
The name "Dreyfus" will remain the brand on 27 Dreyfus-managed money market funds, which have a combined $160 billion in AUM. The BNY Mellon Cash Investment Strategies division of Dreyfus will be renamed Dreyfus Cash Investment Strategies, according to the firm.
"This is another step in our strategy to illustrate how we offer investors the best of both worlds: providing clients with access to the investment capabilities and creative solutions from our world-class investment managers, combined with the global scale and financial stewardship of BNY Mellon," said Mitchell Harris, CEO of BNY Mellon Investment Management.
BlackRock to spend $1.3B on risk management platform
BlackRock announced plans to acquire French software provider eFront in an effort to expand its private equity and real estate analytics for clients, according to Bloomberg News.
The purchase, which includes a 100% equity interest deal for $1.3 billion in cash, will add eFront to BlackRock's existing risk management technology platform, Aladdin.
"Technology and illiquid alternatives are two pillars of BlackRock's growth, and this transaction provides a unique opportunity to accelerate our positioning in both," said BlackRock CEO Larry Fink. "We're particularly excited about eFront's global footprint, including its headquarters in Paris, which is a key market on the continent for BlackRock."
PRODUCTS
BlackRock makes cuts to largest equity index mutual fund
BlackRock will reduce the price large investors pay to invest in the firm's biggest equity index mutual fund, The Wall Street Journal reported.
In July, the firm says the least expensive new share class of its iShares S&P 500 Index Fund (BSPSX) will drop to $1.25 for every $10,000 invested, down from $4. The fund will carry an investment minimum of $2.5 billion, according to The Journal.
Westwood unveils new fee structure
Westwood, a global investment manager with nearly $17 billion in AUM, will launch a new fee structure called the Westwood Sensible Fees, the firm said.
When earned, Westwood says the new product will combine a zero, or low index-like base fee, plus a linear fee directly linked to any risk-adjusted outperformance. Both structures implement "guardrails when delivering the majority of value-added returns to investors," according to the firm.
Vanguard adds its first active ESG fund
Vanguard said it filed for its first active ESG fund: the Global ESG Select Stock Fund.
The fund, expected to be available for investment by mid-year, will hold stocks over an extended time horizon in an effort to minimize portfolio turnover, according to Vanguard. Wellington Management, which will govern the fund, will select approximately 40 companies that demonstrate long-standing ESG practices and management teams with proven track records of good capital allocation decisions for shareholders.
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Fee wars are great for clients, but don’t judge a fund solely on its expense ratio.
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The Fidelity Zero Total Market Index Fund attracted $753.5 million through Aug. 31, while the Fidelity Zero International Index Fund gathered $234.2 million, according to Fidelity’s website.
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Let’s face it, portfolio management will never be free.
March 7
With expense ratios of 0.45% and 0.55% for Admiral and Investor shares, respectively. The new fund from Vanguard is expected to be among the lowest-cost in the active ESG category.
Goldman launches 5 themed ETFs
Goldman Sachs announced the launch of five new ETFs that focus on creators and adopters of innovation, across a range of sectors market caps and geographies, according to the firm.
The funds, which have expense ratios of 0.50%, are the Goldman Sachs Motif Data-Driven World ETF (GDAT), the Goldman Sachs Motif Finance Reimagined ETF (GFIN), the Goldman Sachs Motif Human Evolution ETF (GDNA), the Goldman Sachs Motif Manufacturing Revolution (GMAN) and the Goldman Sachs Motif New Age Consumer ETF (GBUY). Each will focus on industries where growth is driven by technology — such as manufacturing, finance and data, according to the company.
Hartford Funds introduces securitized income fund
Hartford Funds added the Hartford Schroders Securitized Fund (HITIX), a sub-advised fund by Schroders.
The fund, which has a minimum investment of $2,000, aims to provide long-term returns by investing in U.S. and foreign fixed and floating rated securitized credit instruments across the yield curve, the firm said.
“Just like equities, last year was a volatile year and the fourth quarter of 2018 did a number on the returns of risk assets,” an expert says.
"We believe from a fundamental, technical, and valuation perspective, securitized products offer a unique opportunity today to provide income, and that our use of data and analytics enables us to effectively manage and monitor the downside of the asset class," said Michelle Russell-Dowe, head of securitized credit at Schroders.
Transamerica expands DeltaShares suite with new ETF
Transamerica Asset Management has launched the DeltaShares S&P EM 100 & Managed Risk ETF (NYSE: DMRE), its latest addition to the DeltaShares by Transamerica suite of strategic beta ETFs, the firm said.
The new fund will track the S&P EM 100 Managed Risk 2.0 Index, providing access to the 100 largest companies in the emerging markets, including the Republic of Korea, while seeking to reduce downside risk, the firm said.
Hoya Capital establishes housing ETF
Hoya Capital Real Estate has launched the Hoya Capital Housing 100 ETF in an effort to offer diversified exposure across the entire U.S. housing sector, according to the firm.
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A record 186 funds were shuttered last year. What does this mean for the future of the industry?
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Brexit, worries about trade wars and rising interest rates have prompted a selloff in developed country stocks.
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The funds include a wide range of offerings from emerging markets to precious metals, multi-strategy and REITs.
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"The U.S. housing market is one of the largest — and arguably the most important — asset class in the world," said Alex Pettee, president of Hoya Capital Real Estate. HOMZ, expected to distribute monthly dividends, is the firm's first ETF.
DWS and Ilmarinen launch ETF suite
DWS Group introduced Xtrackers MSCI USA ESG Leaders Equity ETF, which was developed in collaboration with Ilmarinen, the largest pension insurance company in Finland. The fund, which has an expense ratio of 0.10%, provides exposure to large and medium-cap U.S. firms.
"Our focus on our clients is paramount and we are delighted to collaborate with Ilmarinen to develop and bring USSG to the market," said Fiona Bassett, Global Co-Head at DWS.
ARRIVALS
Franklin names CFO successor
Franklin Resources named Matthew Nicholls, a former managing director and global head of investment banking at Citigroup, as the firm's executive vice president and chief financial officer, effective May, 6.
Based in San Mateo, California, Nicholls will succeed Ken Lewis, who is completing a 30 year tenure with the firm. Lewis will remain with the firm to oversee the transition period. He will report to Greg Johnson, CEO of Franklin Resources.
"I look forward to collaborating with the firm's leadership team and its Board of Directors to capitalize on the significant opportunities I see ahead," said Nicholls.
Horizon Investments appoints CIO
Horizon Investments announced the appointment of Scott Ladner, its former head of investment management, to chief investment officer and chair of the firm's investment committee.
Ladner, based in Charlotte, North Carolina, will support the firm's teams in market analysis and portfolio building, according to Horizon.
"Our goals-based strategies continue to see tremendous demand from financial advisors and Scott's investment research and market insights have played a major role in that success," said Robbie Cannon, CEO at Horizon.
Symmetry Partners adds engagement director
Symmetry Partners has tapped William Chettle, the former marketing and communications head at Loring Ward, as director of experience and engagement, the firm said.
Based in Glastonbury, Connecticut, Chettle will oversee the company's marketing and communications programs and is responsible for building a greater brand awareness for the company and cultivating higher levels of engagement with clients.
"At Symmetry Partners, we're committed to enhancing our talent and boosting our growth through strategic hires," said David Connelly, principal and co-founder of Symmetry Partners. "William will play a major role in positioning and communicating Symmetry's value proposition to our key stakeholders and we are excited to welcome him to the team."
