Wisdom Tree Unveils Fixed Income Strategy
WisdomTree has released its Barclays Yield Enhanced U.S. Short-Term Aggregate Bond Fund (SHAG). The fund seeks to enhance yield by sourcing and reweighting subcomponents within the short end of the U.S. Aggregate fixed income universe, while maintaining similar risk characteristics. It has a net expense ratio of 0.12%. The firm notes that SHAG over-weights credit securities and under-weights treasuries.
“In a market environment where every basis point counts, over-weighting treasuries might not be your first stop on the road to income,” says Kevin Flanagan, senior fixed income strategist at WisdomTree. “SHAG may serve as a powerful tool for investors seeking to navigate a potential rising rate environment.”
In a statement, Wisdom Tree noted: “With another potential rate hike a few weeks away, SHAG offers a solution for investors who wish to shorten the duration of their fixed income portfolio—particularly if they are concerned about rising rates—while still focusing on income.”
NEXT: Fidelity Launches ESG Index FundsFidelity Launches ESG Index Funds
Fidelity Investments has launched two new index funds focused on sustainable companies. The Fidelity U.S. Sustainability Index Fund and Fidelity International Sustainability Index Fund will allow investors to contribute to companies with a positive impact on environmental, social and governance (ESG) ideals.
The funds offer multiple share classes and are available directly to individual investors as well as through third-party financial advisers and workplace retirement plans. These products extend Fidelity’s ESG offerings, which currently include an actively managed mutual fund—Fidelity Select Environment & Alternative Energy Portfolio—and Fidelity’s FundsNetwork program, which provides investors access to more than 100 ESG funds.
“Launching the ESG funds reaffirms Fidelity’s commitment to providing our 26 million customers access to a diverse set of investment vehicles to meet their distinct financial goals,” says Colby Penzone, senior vice president for Fidelity’s Investment Product Group. “We understand that some investors may choose to advance specific causes, based upon their own principles. As a result, we expect the ESG factors used in the new funds to help many investors better align their personal principles with their investment objectives.”
Each fund will attempt to replicate the performance of its respective index, before expenses, by normally investing at least 80% of its assets in securities included in the index, the firm says. The Fidelity U.S. Sustainability Index Fund will seek to provide investment results that correspond to the total return of the MSCI USA ESG Index, a capitalization-weighted index that provides exposure to companies with high ESG performance relative to their sector peers, as rated by MSCI ESG Research. MSCI USA ESG consists of large- and mid-cap companies in the U.S. market.
The Fidelity International Sustainability Index Fund will seek to provide investment results that correspond to the total return of the MSCI All Country World Index (ACWI) ex USA ESG Index, a capitalization-weighted index that provides exposure to companies with high ESG performance relative to their sector peers, as rated by MSCI ESG research. MSCI ACWI ex USA ESG consists of large- and mid-cap companies across 22 developed markets and 23 emerging markets.
The funds will be available in three distinct share classes: Investor Class, Premium Class and Institutional Class.
NEXT: Envestnet Offering 3(38) Investment Service to TIAA Clients
Envestnet Offering 3(38) Investment Service to TIAA Clients
Envestnet Retirement Solutions (ERS) announced its customized 3(38) investment management service platform, Envestnet Fiduciary Advantage, will be available to plan sponsors and advisers whose retirement plans include TIAA's Custom Portfolios Model Service. The same 3(38) investment management services will be made available to plan sponsors, or their advisers, that wish to incorporate TIAA's Target Income Models, which apply Liability Driven Investing (LDI) principles.
"Our arrangement with TIAA will offer fiduciary support for the broader swath of advisers that wish their plan sponsor clients to take advantage of TIAA's Target Income Models, but may choose not to take on the fiduciary responsibility for managing the portfolios themselves," says Robert Bernstein, co-founder and senior managing director of Envestnet Retirement Solutions. "We are pleased to provide fiduciary support to plan sponsors using TIAA's innovative model service given TIAA's long-held respect by industry insiders and the educators whose retirement plans it serves. We are also proud to help TIAA enable an even broader community of plan participants across the country to potentially save more for retirement using its Custom Portfolios Model Service and Target Income Models."
The Envestnet Fiduciary Advantagepowered by ERS's institutional-caliber research enables plan sponsors and their advisers to ensure they are selecting, managing, and reporting plan investments in accordance with their fiduciary duty, the firm notes. It allows plan sponsors and advisers to utilize the proprietary, systematic ERS SCORE Methodology to select plan investments that are in the best interests of participants.
"Plan sponsors and advisers are interested in simple yet sophisticated default solutions, like our Target Income Models, that focus on creating retirement income for plan participants," says Dan O'Toole, senior managing director and head of Institutional Investment Solutions and Research at TIAA. "By offering 3(38) services that provide plans using our custom solutions with fiduciary support, more institutions and participants will have access to lifetime income solutions in their retirement plans."