Products June 25, 2014

OneAmerica to Acquire City National Bank's Retirement Services

OneAmerica will acquire City National Bank’s San Diego-based retirement services recordkeeping business.
Reported by

While the terms of the acquisition agreement were not disclosed, the transaction is expected to close later this year. The new business will adopt the name OneAmerica Retirement Services LLC. OneAmerica will continue business operations from the current San Diego location and clients will continue to work with their current service team.

OneAmerica and City National Bank will also enter into a strategic alliance whereby City National will distribute OneAmerica retirement products and provide directed trustee services to select OneAmerica retirement customers.

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“The acquisition of City National Bank’s San Diego retirement services operation will significantly expand and enhance our operations and client service capabilities. This strategic alliance will assist us in our continued growth plans by bringing new participants and plans into the retirement services portfolio of OneAmerica,” says Scott Davison, president and chief executive officer of the companies of OneAmerica, based in Indianapolis.

City National’s retirement business manages more than 240 plans with 40,000 participants and has $6.5 billion in assets under administration. OneAmerica’s retirement services businesses serve more than 10,000 plans with 680,000 participants and have more than $24 billion in retirement assets.

The transaction is not expected to have a material impact on City National’s financial results.

OneAmerica Financial Partners, Inc. (www.oneamerica.com) is a provider of retirement plan products and services, individual life insurance, annuities, long-term care solutions and employee benefit plan products. City National Bank (www.cnb.com), a subsidiary of City National Corporation, is a provider of banking, investment and trust services.

Products June 25, 2014

J.P. Morgan Launches Strategic Beta ETF

 J.P. Morgan Asset Management has launched its first exchange-traded fund (ETF), JPMorgan Diversified Return Global Equity.
Reported by

The J.P. Morgan ETF is designed to provide market participation with lower volatility, and starts with the premise that traditional market-cap weighted and single-factor indices expose investors to excessive risk concentrations and a systematic bias toward overvalued securities. Therefore, the fund seeks to reallocate risk by weighting stocks according to four factors: value, size, momentum and low volatility. Research has shown that these factors, when combined, may offer better risk-adjusted returns.

The fund is managed by an experienced J.P. Morgan team, with 18-year veteran Beltran Lastra as the lead portfolio manager. Lastra’s team currently manages $12 billion in asset under management globally as of April 30, 2014.

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“We believe that J.P. Morgan has unique investment insights and global capabilities that will be attractive to ETF investors, and this product is an important first step in delivering those capabilities,” says Robert Deutsch, head of the ETF business for J.P. Morgan Asset Management, based in New York. “J.P. Morgan has grown to one of the largest global mutual fund managers and our ETF offering will be a natural extension our product lineup.”

JPMorgan Diversified Return Global Equity is a strategic beta, developed market equity ETF that tracks an index co-developed with FTSE Group, the FTSE Developed Diversified Factor Index. According to Deutsch, the fund represents the next generation of strategic beta ETFs. More institutional investors are using strategic or smart beta ETFs, many in an effort to reduce portfolio volatility (see “Smart Beta ETFs Can Be Used to Reduce Volatility”).

“We are delighted that J.P. Morgan has chosen FTSE as the index provider for launching their new ETF business in the United States,” says Jonathan Horton, president of FTSE North America. “Electing to work with FTSE to co-develop the methodology behind this ground-breaking multi-factor index series is a great example of combining J.P. Morgan’s research and investment process know-how with our index expertise creating customized solutions in partnership with clients.”

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