Investment Product and Service Launches

Schwab Asset Management reduces fees on 10 funds; LeafHouse Financial Services announces new DCIO service; and Russell Investments expands personalized managed accounts.

By DJ Shaw

Schwab Asset Management Reduces Fees on 10 Funds

Schwab Asset Management, the asset management arm of The Charles Schwab Corporation, has announced the reduction of the operating expense ratios of 10 passively managed exchange-traded funds and actively managed mutual funds.

These changes are in addition to the fee reductions that took place in December 2021 for five other fixed-income ETFs. In February of this year, the net operating expense ratio of the Schwab International Opportunities Fund, an actively managed mutual fund, was also reduced, to 0.83% from 1.25%.

“We continually review our cost-effective product suite to find new opportunities to lower expenses for investors,” says David Botset, managing director, head of equity product management and innovation at Schwab Asset Management. “We’re committed to delivering products that are affordable, accessible and scalable, and we are very pleased to be able to continue to make our clients the beneficiaries of our strategic focus.”

LeafHouse Financial Services Announces New DCIO Service

LeafHouse Financial Services LLC has announced that its investGrade service is live for defined contribution investment only professionals. InvestGrade focuses on “democratizing data” to increase the free flow of information in the retirement plan industry.

According to the firm, this approach promotes transparency and allows people to make informed decisions to increase positive outcomes and lower cost. Early adopters will be able to drive future features, the firm adds.  

The cloud-based service creates an efficient solution that puts data to work to benefit advisers, employers and their employees, according to the firm. InvestGrade developers incorporate over a decade of research and technology development experience working with advisers, recordkeepers, third-party administrators and DCIO firms to create an interactive ecosystem.

With the service, investment managers can explore over 100,000 unique investments. It also offers filters and comparison tools that include an investment grade point average system.

The GPA scoring approach is designed as an easy-to-understand score on investments that range from 1.0 to 4.0. The GPA is applied to funds in retirement plans, including collective investment trusts and index funds. This allows investment managers to compare fund returns data and realign resources. This independent data exchange allows DCIOs to aggregate assets, positions and plans from all recordkeepers in one location with the proper licensing agreements.

InvestGrade is partnering with projekt202, which specializes in designing and building end-to-end user-centric experiences across multiple verticals and segments. The service will be available to advisers in the fall and will include a “freemium model,” meaning advisers will be able to use the off-the-shelf version for no cost with options to upgrade and customize.

Russell Investments Expands Personalized Managed Accounts

Russell Investments has expanded its suite of personalized managed accounts with the launch of two additional direct-indexed options that deliver customizable exposure to international and core equity.

The firm’s PMA suite now features eight separately managed accounts that blend actively managed equity SMAs with direct-indexed SMAs. These solutions leverage technology to help investors achieve growth and optimal after-tax outcomes, according to the firm.

The PMAs offer a wide range of custom overlay and exclusion services, including maximizing after-tax wealth, developing an optimal tax-efficient transition plan, aligning specific ESG preferences with investments, diversifying concentrated stock positions and limiting purchases in stocks or industries that the client already owns or is biased against.

Russell Investments’ PMA solution features a dedicated team of portfolio managers, quantitative research analysts and service teams. They also feature centralized trading and implementation, as well as automated year-round tax management capabilities, including tax-loss harvesting, wash sale minimization, tax-smart turnover and holding-period management.

Ultimately, the accounts aim to help clients meet their desired outcomes by minimizing the impact of taxes and transaction costs while maintaining tracking error to a target portfolio.

The newly added Personalized Direct Indexed Core Equity SMA seeks to provide long-term capital growth through an allocation to stocks in U.S. and international developed markets. It is designed to track the performance of a blended allocation to the Russell 3000 Index and the MSCI World ex USA (Net) Index. The newly added Personalized Direct Indexed International SMA seeks to provide long-term capital growth from stocks in non-U.S. developed markets. It is designed to track the performance of the MSCI World ex-USA (Net) Index.