Investment Product and Service Launches

SEI acquires Novus Partners; Dimensional Fund Advisors lists four fixed-income ETFs; BrightPlan unveils new capabilities to support responsible investing; and more.

By DJ Shaw
Art by Jackson Epstein

Art by Jackson Epstein

SEI Acquires Novus Partners

SEI has announced the acquisition of Novus Partners, a global portfolio intelligence platform company, with the goal of expanding SEI’s capabilities for both the institutional investor and investment management markets. 

Novus’ platform streamlines data management, performance measurement, reporting, attribution and look-through analysis in a single digital tool. SEI says the addition of these data management and analytics capabilities to SEI’s enhanced chief investment officer (CIO) platform helps meet the needs of the markets it serves. With Novus’ analytics tool for exposure, attribution and risk, SEI can provide large institutional investors and asset owners with a complete front-to-back-office solution across all asset classes.  

Following the acquisition of Novus, SEI intends to enhance its current offering by integrating Novus’ global portfolio intelligence tool, now branded as SEI Novus, with SEI’s comprehensive investment intelligence and processing capabilities. SEI Novus will continue to provide asset managers with advanced portfolio intelligence, analytics and reporting technology to improve their overall investment programs and to allow them to share data and intelligence with large institutional investors and asset owners.  

“We identified a significant need among larger institutional investors for an end-to-end solution that provides enriched data and analytics,” says Paul Klauder, head of SEI’s institutional group. “We believe the combination of SEI Novus’ front-end analytics capabilities with our extensive middle- and back-office investment processing capabilities and knowledge of institutional markets ultimately delivers that solution. We welcome the Novus team to the SEI family and look forward to their contribution to our client offering and our company’s growth.”

Sphere and Reflection Asset Management Launch No Fossil-Fuel Fund

California-based startup Sphere announced it has partnered with Securities and Exchange Commission (SEC)-registered investment advisory firm Reflection Asset Management (RAM) to launch the Sphere 500 Fossil-Free Index Fund, billed as a mutual fund designed to remove the barriers that have kept fossil-free options out of 401(k) retirement plans.

The fund is available on multiple brokerage platforms, including Interactive Brokers, with Vanguard and Vestwell in the process of onboarding, and on 401(k) platforms such as Matrix and Mid Atlantic Capital Group. Additional platforms are being added. Initially, financial firms Green Retirement and Carbon Collective plan to offer the fund to 401(k) clients.

The Sphere 500 Fossil-Free Index Fund tracks the Sphere 500 Fossil-Free Index, which is comprised of the largest 500 U.S. companies by market capitalization, minus approximately 40 companies whose primary lines of business are in the fossil fuel industry, as defined by the nonprofit As You Sow.

The index was calculated by independent third-party index calculation agent BITA. The 40 or so companies that are excluded make up about 5% of the total market capitalization of the top 500 group.

Dimensional Lists Four Fixed-Income ETFs

Dimensional Fund Advisors has listed the company’s first four active, transparent, fixed-income exchange-traded funds (ETFs) and filed a preliminary registration statement for 10 more equity ETFs.

The new fixed-income ETFs seek to offer robust risk management and to use information in market prices to invest in bonds with higher expected returns, rather than trying to outguess the market or time interest rates.

The new funds include the Dimensional Core Fixed Income ETF, described as a U.S. core fixed-income solution pursuing higher expected returns through systematic duration and credit management; the Dimensional Short-Duration Fixed Income ETF, described as a U.S. short-duration core solution pursuing higher expected returns through systematic duration and credit management; the Dimensional National Municipal Bond ETF, described as a national municipal bond solution targeting higher expected returns while seeking to provide income that is exempt from federal personal income tax; and the Dimensional Inflation-Protected Securities ETF, described as a U.S. Treasury inflation-protected securities (TIPS) solution targeting higher expected returns while providing protection from inflation.

Franklin Templeton Selects FIS to Operate Global Transfer Agency Services

Franklin Resources Inc., the global investment management organization operating as Franklin Templeton, and financial technology firm FIS have announced that FIS will assume operation of Franklin Templeton’s global transfer agent (TA) function as a sub-agent or delegate, depending on the jurisdiction.

All Franklin Templeton transfer agent employees affected by this change will be given job opportunities, according to the firms. Most will have the opportunity to work directly for FIS, and others will remain at Franklin Templeton as part of a redesigned team. The firms say this will provide a seamless servicing transition for clients. For FIS, this partnership aligns with its focus on expanding its business-process-as-a-service offering, as well as accelerating its reach into new markets across Canada, Europe and Asia–Pacific.

This agreement will allow Franklin Templeton to continue to focus on its core business of investment management. For FIS, it will allow the company to broaden the transfer agency services it provides to investment managers and asset servicers, including investor servicing and recordkeeping across multiple product types and jurisdictions.

In connection with the transaction, Franklin Templeton will transfer the rights to certain aspects of its intellectual property to FIS, including solutions supporting the ability to provide multi-jurisdictional international transfer agency services and 529 college saving plan functionality.

“By partnering with FIS, Franklin Templeton will be able to transition its transfer agency services to a managed solution to realize key servicing enhancements and operational efficiencies, while minimizing its enterprise risk,” says Nasser Khodri, FIS head of capital markets. “With the additional capabilities FIS has acquired as part of this partnership, the asset management and servicing community now has a modern, technology-driven choice for global transfer agency services, backed by the commitment and stability of FIS.”

Under the terms of the agreement, Franklin Templeton will remain the named transfer agent or central administrator globally and will oversee FIS in the provision of its services. As part of this strategic partnership, approximately 1,450 Franklin Templeton employees across Asia–Pacific, Canada, Europe and the U.S. will be given the opportunity to join FIS.

Vontobel Rolls Out Fixed-Income Strategies in U.S.

Vontobel has launched three emerging markets fixed-income strategies.

Vontobel’s emerging markets bonds team follows a differentiated, high-conviction and bottom-up focused investment approach. It is based on a contrarian approach, striving to generate consistent and strong risk-adjusted returns for investors by capturing value and event-driven opportunities. Through environmental, social and governance (ESG) considerations and integration, the team aims to improve the long-term risk-return characteristics of its portfolios while reflecting its clients’ values.

The following three strategies are now available as separate account vehicles:

The Emerging Markets Debt Strategy specializes primarily in hard-currency sovereign debt and aims to capitalize on primarily bottom-up value opportunities that occur due to irrational, herd-like investor behavior, while monitoring the liquidity and diversification of the portfolio. The strategy is managed by Luc D’hooge and Wouter Van Overfelt.

The Emerging Markets Corporate Bond Strategy employs a bottom-up and relative-value approach, using in-depth knowledge of issuers to find value opportunities and event-driven situations which may be decorrelated from the broader market and global interest rates. The strategy is managed by Wouter Van Overfelt and Sergey Goncharov.

The Emerging Markets Blend Strategy combines the best ideas from the emerging market sovereign and corporate debt strategies in hard currencies with a local currency overlay—a solution for U.S. investors who desire to outsource their emerging market fixed-income allocation. The strategy is managed by an experienced group of portfolio managers within the emerging markets bonds team, including Luc D’hooge, Sergey Goncharov, Wouter Van Overfelt, Thierry Larose and Carl Vermassen.

The portfolio managers on these three emerging markets strategies have an average of 25 years of experience and have been managing these strategies since their respective inceptions.

BrightPlan Unveils New Capabilities to Support Responsible Investing

BrightPlan has announced the launch of its environmental, social and governance (ESG) portfolio, along with new enhancements to its investing capabilities. BrightPlan’s leadership says the new investing capabilities are “core to enabling employees’ financial well-being by providing them with more choices to invest for their life goals in a way that aligns with their values.” 

“Supporting the development of employees’ holistic financial well-being includes growing and building wealth through investing,” says Marthin De Beer, founder and CEO of BrightPlan. “In a world of cryptocurrency and meme stocks, employees who are ready to invest in a way that aligns with their values need a solution that guides them in the right direction.”

Employees enrolled in BrightPlan can now invest their money in a way that better aligns with their personal values through the ESG portfolio. It invests in funds that use various ESG criteria when choosing which companies to invest in. For example, an employee who cares about climate change may want to invest in portfolios that include companies with a lower carbon footprint or have sizable investments in renewable energy. Likewise, an employee who cares about social issues may want to invest in portfolios that include companies that perform well on gender diversity or have ethical supply chains.

In the stock portion of the portfolio, BrightPlan uses funds managed by BlackRock that give greater weights to companies leading their industry in ESG practices. BrightPlan also uses TIAA-CREF to strategically allocate to bonds with direct and measurable impact. 

Separately, BrightPlan’s new index portfolio allows employees to invest their money in an assortment of index funds and exchange-traded funds (ETFs) customized to their risk tolerance and time horizon. This passive investment approach is BrightPlan’s simplest and lowest cost option that emphasizes broad diversification while minimizing fees and taxes.

Based on investors’ responses to several questions and key data points, BrightPlan will recommend and select a fitting investment strategy. Guidance provided by BrightPlan follows the best practices of investment management by customizing investment portfolios according to an employee’s goals, risk tolerance, time horizon and other preferences, while minimizing costs and maintaining global diversification.

Fidelity Launches Guaranteed Income Direct

Fidelity Investments has announced the launch of Guaranteed Income Direct, a retirement income product that allows individuals to convert a portion of their 401(k) or 403(b) savings into an annuity to provide consistent, pension-like payments throughout retirement.

“Shifting from saving for retirement to living in retirement is one of the biggest transitions a person will make in their lifetime, and one of the top challenges facing individuals during this transition is how to ensure that they have enough predictable income to cover their essential expenses,” says Keri Dogan, senior vice president, retirement solutions, at Fidelity. “Our new Guaranteed Income Direct product provides employees with a simplified option to use their retirement savings plan assets to create their own personal pension and provide them with a steady, reliable stream of income to help cover their expenses in retirement.”

Fidelity’s Guaranteed Income Direct enables employers to provide their workers with a straightforward option of an immediate income annuity, with institutional pricing and offered by the insurer of their choice, that is combined with support and digital tools to help workers determine the amount of guaranteed income that is right for them.

Individuals have the flexibility to convert any amount of their retirement plan savings to guaranteed retirement income. Any savings that are not converted to an annuity can remain in the workplace savings plan. The entire experience is integrated with Fidelity’s employee benefits portal, which also includes education and support from Fidelity to help employees as they consider their options.

Scheduled to launch for select clients in the first half of next year, Fidelity Guaranteed Income Direct will have broad availability in the second half of 2022.