Investment Products and Service Launches

State Street Global Advisors Adds 88 Firms to Gender Diversity Index; Morningstar Credit Ratings Now Ranking Financial Institutions; and Morningstar Partners With Advicent to Upgrade Asset Allocation Classification.

State Street Global Advisors Adds 88 Firms to Gender Diversity Index

State Street Global Advisors, the asset management arm of State Street Corporation, has added 88 new companies to its Gender Diversity Index. Launched in March 2016, the index tracks U.S. exchange-listed large capitalization companies with the highest levels of gender diversity on their boards of directors and in their senior leadership.

Following an annual rebalance effective after the close of trading on July 15, 2016, the top companies added were Pfizer Inc., PepsiCo, 3M, Mastercard, Starbucks, DuPont, Biogen, Salesforce, Target and The Kroger Co, according to Index weighting.

“We applaud the new additions for their efforts in confronting the gender diversity challenge by hiring and retaining women in senior leadership,” says Ronald O’Hanley, president and chief executive officer of State Street Global Advisors. “As an organization, we are deeply committed to helping to close the gender gap in the workplace, but cannot achieve this goal on our own. We need to work together to strengthen gender diversity and inclusion practices across corporate America.”

The SSGA Gender Diversity Index is rebalanced on an annual basis to ensure the reflection of its ongoing objective of tracking the performance of companies dedicated to advancing women throughout their senior leadership positions, SSGA says.

According to a study by the research firm MSCI, which explored global trends in gender diversity on corporate boards between December 2009 and August 2015, companies with at least three female board members, or companies with a higher percentage of women on the board than its country’s average, performed better as measured by return on equity (10.1% per year versus 7.4% for all other companies).

Despite these findings, American women account for an average of just 16% of the members of executive teams, MSCI reports.  

According to MSCI, the methodology used in its study is different than that of the Index, and as such, the results of the study should not be viewed as indicative of the future performance of the Index.

The full MSCI study can be found online here.

NEXT:Morningstar Credit Ratings Now Ranking Financial Institutions

Morningstar Credit Ratings Now Ranking Financial Institutions

Morningstar Credit Ratings, a Morningstar subsidiary, recently announced the Securities Exchange Commission (SEC) has authorized it to rate corporate issuers under its Nationally Recognized Statistical Rating Organization (NRSRO) registration.

Morningstar’s corporate credit analyst team will continue to provide research, ratings, and analysis for corporate entities. The company will pursue ratings assignments for security-specific corporate debt offerings, unsecured real estate investment trust debt, and financial institutions.

"Morningstar has a long tradition of providing investors with independent and robust research and ratings on all types of investments,” says Vickie Tillman, president of Morningstar Credit Ratings. “Over the past several years, investors have come to rely on our ratings and analysis in the structured finance markets."

She added, "The expansion of our NRSRO registration to corporate issuers and financial institutions allows us to bring transparency and unique forward-looking perspectives to investors and issuers and provides a compelling alternative to the other NRSROs. Investors will also benefit from the ability to use our ratings to satisfy investment guidelines and determine risk-based capital charges on corporate debt securities."

Morningstar launched corporate credit ratings and research in December 2009, issuing entity-level, non-NRSRO ratings and analysis. Morningstar’s 13-member corporate credit analyst team will move to Morningstar Credit Ratings. Morningstar's corporate and financial institution credit ratings is recognized as NRSRO credit ratings, as of Aug. 24, 2016.

NEXT: Morningstar Partners With Advicent to Upgrade Asset Allocation Classification

Morningstar Partners With Advicent to Upgrade Asset Allocation Classification

Morningstar has partnered with Advicent to upgrade asset allocation classification from a returns-based methodology to a holdings-based one, citing an investment-analysis trend shift which indicates that holdings-based classification is at the moment more representative of the underlining characteristics of investment products.

Both firms will lead this new strategy with the NaviPlan 16.2 software.

“Advicent constantly strives to further improve the quality of our financial planning calculations backed by decades of financial industry experience,” says Don Breber, product director at Advicent. “The move to holdings-based asset allocation will empower advisers to provide a more forward-looking outlook for investment trends through plans that are prepared for an ever-changing financial market.”

In addition to the asset-allocation upgrade, NaviPlan 16.2 also includes several new standalone and client reports. These reports provide a different way to analyze cash flow throughout the plan, and how retirement needs impact asset growth or shrinkage throughout the entire retirement period, the firm says.  

The new Retirement Cash Flow Summary Report will allow advisers and their clients to track year-by-year cash flow during retirement, and they can also monitor different categories of income, expenses, account contribution and reinvestments.

Users can also analyze how inflows and outflows are impacting retirement assets with the Retirement Need and Investable Assets reports. They can also separate account withdrawal and contributions by account type, asset balances, and asset type. Morningstar says these updates will allow advisers to give clients a different way to look at retirement assets by showing them exactly where withdrawals are coming from, and when specific asset types begin to drain, offering an opportunity to discuss account liquidation orders as financial strategies.

To learn more about the shift from returns-based to holdings-based asset allocation, the methodology, and other changes in NaviPlan, visit the Advicent Learning Center for recorded versions of the What’s New Webinars here.