Investment Product and Service Launches

American Century Investments to develop new equity and fixed income suite; HealthSavings Administrators releases HSA investment vehicle; DWS Group launches ESG ETF; and more.

Art by Jackson Epstein

Art by Jackson Epstein

American Century Investments to Develop New Equity and Fixed Income Suite

American Century Investments announced the hiring of Eduardo Repetto, Ph.D., as chief investment officer and Patrick Keating as chief operating officer to develop a new suite of broadly diversified, tax-efficient and cost-effective equity and fixed income solutions. The new solutions will be designed by Repetto, who previously served as co-chief executive officer/chief investment officer of Dimensional Fund Advisors (DFA) until 2017. Keating also served in a variety of senior leadership roles at DFA, including chief operating officer, until he left the firm in 2017.

“Eduardo and Patrick bring new skills and capabilities that will benefit American Century clients around the world,” says Jonathan Thomas, American Century’s chief executive officer. “We plan to leverage their tremendous knowledge and expertise to build unique systematic investment processes at Avantis Investors that we believe will form a solid basis for long-term asset allocation solutions.”

Once the registration process is completed, American Century plans to offer five equity strategies across market capitalization and geography in exchange-traded fund (ETF) and mutual fund vehicles. The new strategies will seek to implement an effective and repeatable investment process that utilizes an academic-based framework that aims to identify securities with higher expected returns. The firm expects the new investment vehicles to launch later this year, with separate account formats also available.

Repetto’s career with DFA spanned 17 years. He served as chief investment officer beginning in 2007 and co-chief executive officer starting in 2009, roles he held until his departure from DFA in 2017. Repetto earned a Ph.D. in aeronautics from the California Institute of Technology, an MSc in engineering from Brown University and a Diploma de Honor in civil engineering from the Universidad de Buenos Aires. 

Prior to joining American Century, Keating was with DFA for 15 years and served as chief operating officer with responsibility for the firm’s day-to-day business functions, including the management of growth plans and capital investment. Prior to that, he was chief executive officer and executive vice president and director of Assante Capital Management. Keating earned a bachelor’s degree in economics from the University of Winnipeg, Canada. He is a CPA (Canada), a CFA Charter holder and member of the CFA Institute.

HealthSavings Administrators Releases HSA Investment Vehicle

HealthSavings Administrators has unveiled its new Investor Focus HSA [health savings account] with a curated lineup of 42 funds from Vanguard and Dimensional with low expense ratios and no trading fees. 

The new Investor Focus HSA offers all core asset types, an even balance between passive and active funds, and achieves an average Morningstar rating of 3.96 (out of 5) stars across all funds. The new menu features 12 U.S. Equity funds, 1 Sector Equity fund, 14 Allocation funds (including several target-date funds [TDFs]), seven taxable bond funds and one Money Market option. With this new lineup, expense ratios are down for both active (25 bps) and passive (10 bps) funds, and the overall weighted average of  11 bps is 75% lower than the 47 bps weighted average cited by “DevenirResearch 2018 Year-End HSA Market Report.”

“We remain steadfast in our commitment to offering the leading investor-focused fund lineup to support our account holders’ goals as they prepare for retirement,” says Jennifer Harris, vice president of product development & program management at HealthSavings. “Our tight lineup of institutional-class funds underscores this commitment and further encourages adoption among investment-minded account holders who keenly understand the value of an Investor HSA as essential for future financial freedom.” 

To learn more about the HealthSavings fund lineup, visit here.

DWS Group Launches ESG ETF

DWS Group has expanded its environmental, social and governance (ESG) product lineup with the launch of Xtrackers S&P 500 ESG ETF (SNPE). The company says the new fund is the first exchange -traded fund (ETF) to provide exposure to an ESG-adjusted S&P 500 index in the U.S. market. 

“Our clients seek solutions that not only deliver on their investment strategy, but also help them achieve their sustainability goals,” says Luke Oliver, head of Index Investing for the Americas at DWS. “Through our Xtrackers ESG ETF suite, investors are able to access environmental, social and governance adjusted core benchmarks that they can use at the heart of their portfolios, allowing them to invest in companies that are well-positioned for the future.”

“We are pleased to reach this licensing agreement and work with DWS Group on their new exchange-traded fund based on the S&P 500 ESG Index,” says Reid Steadman, S&P DJI’s Global Head of ESG Indices. “The S&P 500 ESG Index was developed to support the growth of sustainable investing. Through use of the new S&P DJI ESG scores, the index helps investors align their investments with their values while still achieving a risk and return profile in line with the S&P 500.”

SNPE follows the successful launch of the Xtrackers MSCI USA ESG Leaders Equity ETF (NYSE Arca: USSG) earlier this year. As of June 24, DWS manages more than 1.2 billion USD in ESG equity ETFs in the U.S. The Xtrackers suite of ESG ETFs also includes the Xtrackers MSCI ACWI ex USA ESG Leaders Equity ETF; the Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF; and the Xtrackers MSCI EAFE ESG Leaders Equity ETF.

SNPE seeks investment results that correspond generally to the performance, before fees and expenses, of the S&P 500 ESG Index. The index excludes companies with disqualifying UN Global Compact scores and business involvement in tobacco or controversial weapons, then targets 75% of the float market capitalization of each Global Industry Classification Standard (GICS) Industry Group within the S&P 500, using an ESG score as the defining characteristic.

Principal Global Investors Releases Interval Fund

Principal Global Investors has launched its first interval fund, the Principal Diversified Select Real Asset (DSRA) fund, which primarily invests in private real assets, including infrastructure, natural resources, and real estate.

“This launch reflects Principal’s commitment to meeting growing client interest and demand for products that offer access and exposure to diversifying private assets,” says Mike Beer, executive director of Principal Funds. “Throughout 2019, we have encouraged clients and investors to reevaluate risk within their portfolios. Offerings like DSRA are designed to help investors address market uncertainty and volatility.” 

Interval funds provide investors with exposure to less liquid investments, while granting managers greater flexibility to invest in private, non-listed assets typically aligned with longer-term investment goals. Exposure to real assets provide investors with differentiated return streams offering the potential for enhanced risk-adjusted returns and income through various market cycle environments.

The launch of the fund is an extension of Principal Global Investor’s asset allocation boutique, Principal Portfolio Strategies, which manages multi-asset and multi-manager strategies and helps solve investors’ need for income, diversification, and inflation protection.