Vanguard Reports Expense Reductions
Vanguard has lowered expenses for 73 share classes offered by a variety of Vanguard mutual funds, including its two largest bond funds and two largest stock funds, complementing changes made to about 200 fund share classes during 2015.
Vanguard is particularly enthusiastic about cuts to the four largest funds it offers, which it bills as four of the largest funds in the world. According to Vanguard, these changes are playing out as follows:
- The Vanguard Total Bond Market Index Fund expense ratio for Investor Shares was reduced by four basis points, to 0.16%; for Admiral Shares, by one basis point, to 0.06%; for ETF Shares, by one basis point, to 0.06%; for Institutional Shares, by one basis point, to 0.05%; and for Institutional Plus Shares, by one basis point, to 0.04%.
- The Vanguard Total Bond Index II Fund expense ratio for Investor Shares was reduced by one basis point, to 0.09%; for Institutional Shares, the expense ratio was reduced by three basis points, to 0.02%.
- The Vanguard Total Stock Market Index Fund expense ratio for Investor Shares was dropped by one basis point, to 0.16%.
- The Vanguard 500 Index Fund expense ratio for Investor Shares was also reduced one basis point, to 0.16%.
Vanguard CEO Bill McNabb notes that clients now pay an average asset weighted expense ratio (the average shareholders actually pay) of 0.13%, which is five basis points below the firm’s average nominal expense ratio of 0.18%.
According to Vanguard, other expense changes are being made to 17 Admiral Shares and 14 ETF Shares, which all expect expense ratio reductions. Overall, the expense ratio reductions span five fund share classes (Investor, Admiral, ETF, Institutional and Institutional Plus) across five fund categories: Domestic stock index, domestic bond index, balanced index, managed payout and tax-managed.
More specific information on the expense changes is at www.Vanguard.com.
Fidelity Reveals Expanded Private Equity Platform
The Fidelity Institutional, the division of Fidelity Investments providing clearing, custody and investment management products to registered investment advisers and brokers, is expanding its alternative investments platform to provide access to a wider range of private equity funds.
Fidelity’s alternative investments platform, launched in October 2013, provides research, education and third-party due diligence, as well as access to a wide range of alternative investment products. According to the firm, this expansion of the platform provides financial advisers and family office professionals with increased access to private equity funds through a new strategic relationship with iCapital Network and expanded relationships with CAIS and Goldman Sachs Asset Management (GSAM).
“Delivering increased access to private equity has been a priority since we launched our alternative investments platform more than two years ago,” explains Mark Haggerty, head of product for Fidelity Institutional. “Advisers have been looking for an effective way to leverage this type of investment strategy. By working with some of the major providers in the private equity space, we believe our offering gives advisers who are interested in private equity the tools to efficiently evaluate and incorporate these investments into their clients’ portfolios.”
Within the new approach, iCapital Network provides a curated selection of single-manager, multi-manager, and vintage year private equity investments at $100,000 minimums, supported by a complement of research and diligence tools, and operational integration with Fidelity’s platform to facilitate access and execution. At the same time, CAIS’ product platform will continue to provide access to a diversified and growing menu of hedge funds and private equity funds at lower investment minimums, including Mercer’s proprietary Private Equity Fund of Funds.
GSAM will provide access to portfolios of external private equity managers utilizing its rigorous process of selecting managers, constructing portfolios and managing risk. Additionally, the firm will offer external hedge fund manager solutions and alternative investment thought leadership for clients. Through Fidelity’s Alternative Investments Network, clients can access registered private equity products for accredited investors.
More information is on www.fidelity.com.
Nationwide Offers Stadion Small-Business Solution
Nationwide has made Stadion’s StoryLine small-business 401(k) solution available on its retirement planning platform.
According to the firms, the StoryLine product has been designed specifically to address the needs of 401(k) participants in adviser-sold, small-market plans. The solution presents a new level of customization for small-plan participants, they argue, which Stadion “sees as a discernible improvement over one-size-fits-all target-date strategies.”
“What makes StoryLine so appealing is its singular focus on small-plan participants,” says Joe Frustaglio, vice president of retirement plan sales for Nationwide, “who often lack the same personalized planning opportunities provided to participants in larger plans.”
StoryLine’s approach recognizes every plan sponsor and employee as unique, he adds. “The StoryLine process first seeks insight into the overall plan makeup with the intent of tailoring default options for each individual company. Then, with Stadion’s participant-centric Web interface, employees will be encouraged to further define their individual investment paths based on personal risk profiles, expectations and goals.”
The firms also expect StoryLine to allow—at the employee’s discretion—the inclusion of outside and spousal assets to facilitate more comprehensive retirement planning. The end goal of this is to have each participant on a path personalized to their own circumstances and needs.
For Nationwide’s financial advisers, the "halo" benefit of StoryLine are the tools available to help deepen their relationships with sponsors and participants as they engage them at the plan level with tailored solutions. In turn, sponsors are then able to offer their employees access to individual personalized planning that goes beyond typical age- and risk-based investment strategies.
For more information, visit Stadion Money Management at www.stadionmoney.com.