Investment Product and Service Launches

BNY Mellon Investment Management launches responsible investment active ETF; Dimensional lists four new international equity ETFs; Nasdaq Fund Network welcomes BlackRock’s Target Allocation ETF models; and more.

Art by Jackson Epstein

Art by Jackson Epstein

BNY Mellon Investment Management Launches Responsible Investment Active ETF

BNY Mellon Investment Management has announced the launch of the BNY Mellon Responsible Horizons Corporate Bond ETF. The exchange-traded fund, which is listed on NYSE Arca, is sub-advised by Insight North America LLC, a subsidiary of Insight Investment and a BNY Mellon investment firm with expertise in fixed income and risk management.

The new active ETF seeks a total return consisting of capital appreciation and income while focusing on corporate debt securities issued by companies that demonstrate attractive investment attributes and business practices, based on Insight’s proprietary environmental, social and governance rating methodology. The fund is managed by Erin Spalsbury and Jonathan Earle, who are both members of Insight’s fixed-income group. The ETF seeks to emphasize what Insight believes to be the best, and avoid the worst, performers on ESG issues, and to carefully consider the approach taken to investments in environmentally sensitive industries. Insight’s philosophy is that ESG risks may affect investment value and as such, need to be analyzed, mitigated and appropriately priced.

BNY Mellon Responsible Horizons Corporate Bond ETF is the sixth actively managed and fourth dedicated sustainable solution in BNY Mellon Investment Management’s ETF range, which offers investors the specialist capabilities of its investment firms delivered through a suite of actively managed and index ETF solutions.

Dimensional Lists Four New International Equity ETFs

Dimensional Fund Advisors, a systematic multifactor investor, has expanded its exchange-traded fund offerings with the listing four new international ETFs on the Chicago Board Options Exchange. The new ETFs offer broadly diversified exposure to core international equities across market caps and styles, as well as component solutions focused on international small cap, international small cap value, and international high profitability equities.

“Recent volatility has demonstrated the continued value of broadly diversified portfolios with added flexibility as well as experienced advisers to help keep investors aligned with their financial plans,” says Dave Butler, Dimensional co-CEO. “The active transparent ETF industry remains relatively nascent, and we believe our approach, which builds on the core principles of indexing by incorporating flexible, daily implementation, will continue to attract investors that believe in investing for the long term.”

The first new fund is the International Core Equity 2 ETF, which has a net expense ratio of 0.23% and seeks to purchase a broad and diverse group of non-U.S. companies in developed markets, with an emphasis on companies with smaller market capitalization, lower relative price and higher profitability.

The second is the International Small Cap ETF, with a net expense ratio of 0.39% and a portfolio designed to purchase small, non‑U.S. companies in developed markets.

The third is the International Small Cap Value ETF, with an expense ratio of 0.42% and a portfolio designed to purchase small, non‑U.S. companies with low prices in relation to their book values in developed markets.

The final new fund is the International High Profitability ETF, which has a net expense ratio of 0.29% and a portfolio designed to purchase large, non‑U.S. companies with high earnings or profits from operations in relation to their book value or assets in developed markets.

The four new funds join a growing lineup of Dimensional ETFs, now totaling 20 funds, that complement the firm’s existing mutual funds and expanded separately managed accounts offerings.

Nasdaq Fund Network Welcomes BlackRock’s Target Allocation ETF Models

Asset manager BlackRock is registering its flagship Target Allocation ETF model portfolios on the Nasdaq Fund Network, paving the way for asset managers to provide greater transparency into this growing but often opaque investment vehicle.

These BlackRock ETF model portfolios are an actively managed solution built with iShares ETFs. For these model portfolios, BlackRock specifically uses iShares ETFs as underlying holdings to provide investors with the potential to manage costs more efficiently. Each portfolio has its own unique objective, offering exposure to various asset classes, industry sectors, style factors, currencies and geographies.

Upon registering these ETF model portfolios, NFN will apply a six-character symbol for each product and disseminate indicative pricing data to institutional and retail investors. With standardized symbology and a searchable ticker, the platform enables advisers and investors to access and assess performance information across market data platforms. It also provides advisers, broker/dealers and investors with easy access to performance information, which is critical given how the breadth and scale of strategies continue to grow.

Specifically, NFN facilitates the collection and dissemination of performance, price or net asset value valuation, and strategy-level reference data to more than 100 million investors for over 35,000 products, including mutual funds, collective investment trusts, structured products, unit investment trusts and 529 college savings plans, as well as alternative investment products.

BlackRock’s Target Allocation ETF models are the first of their kind to be registered on NFN, which is officially expanding its services to include ETF models, separately managed accounts and unified managed accounts.

KraneShares Hires Portfolio Manager for New Active Global Carbon Transformation ETF

Krane Funds Advisors LLC, an asset management firm known for its global exchange-traded funds and investment strategies, has announced that Roger Mortimer has joined the firm to manage the KraneShares Global Carbon Transformation ETF.

The fund is an active ETF that aims to capture the low-carbon leaders of the future. The fund’s focus includes companies in traditionally high-emitting industries proactively focused on carbon transformation. These companies with a stated commitment and demonstrated action towards decarbonization may see superior growth compared to their peers and their own histories. They may also benefit from improved ESG scoring and a revaluation.

Decarbonization is becoming increasingly important as pressure for companies to address climate change intensifies. Driven by political, strategic and economic factors, the necessity for global carbon transformation could present one of the most disruptive and important investment opportunities of the next decade, according to Krane Funds Advisors.

“The recent tragic events in Ukraine have brought the risk of energy dependency into sharp focus. We expect that the critically strategic nature of Europe’s energy crisis will result in accelerated policy implementation and capital spending in energy transition and resiliency,” Mortimer says. “These geopolitical concerns coupled with urgent climate objectives are increasing the awareness of the value of energy transition. KGHG will invest in companies around the world that are seeking to lead the race to decarbonize.”