Investment Products and Service Launches

Lincoln Financial and BlackRock Launch Variable Annuity; Vanguard Taps RS Investments to Manage Mid-Cap Growth Fund; LGIMA Releases New Scientific Beta Funds for Institutional Investors; and more.
Lincoln Financial and BlackRock Launch Variable Annuity

To help fee-based advisers meet their clients’ lifetime retirement income needs, Lincoln Financial Group has partnered with BlackRock to develop a new variable annuity, Lincoln Core Income. It’s built exclusively with BlackRock’s iShares exchange-traded funds (ETFs). The annuity is designed to provide guaranteed lifetime income, which can increase each year.

“Retirement savers are facing unprecedented challenges,” says Will Fuller, president, Annuity Solutions, Lincoln Financial Distributors and Lincoln Financial Network. “People are living longer, equity markets are volatile and interest rates remain low, putting more pressure on their savings to work harder for longer to provide adequate income. Annuities can provide income for life that is guaranteed and an essential strategy for savers who want to know they have predictable income.”

The fund is expected to be available during the first quarter of 2017. There is no surrender charge, according to Lincoln Financial.

“Fee-based advisers want a simple, transparent and lower-cost strategy without a surrender charge that fits the way they serve their clients,” says Fuller. “Lincoln Core Income, built with iShares can provide savers with the equivalent of a paycheck for life that increases every year. We fully expect this product to be welcomed by retiring Baby Boomers and the advisers that serve them.”

Salim Ramji, head of BlackRock’s U.S. Wealth Advisory business, says: “A shift by advisers toward fee-based models is a growing trend. Lincoln and BlackRock are collaborating to meet the need of advisers looking for simpler ways to help clients meet their retirement income goals with more low-cost, quality options using ETFs.”

NEXT: Vanguard Taps RS Investments to Manage Mid-Cap Growth Fund

Vanguard Taps RS Investments to Manage Mid-Cap Growth Fund

The RS Investments team of Victory Capital Management will oversee Vanguard’s $4.1 billion Mid-Cap Growth Fund. The firm will manage 50% of the fund previously managed by Chartwell Investment Partners.

The RS Investments team utilizes a bottom-up stock research and selection process. Its investment strategy is rooted in deep analysis to identify the drivers of sustainable, long-term growth. Scott Tracy, CFA, chief investment officer of the eight-person RS Investments Growth Team, will serve as co-portfolio manager along with Steve Bishop, Melissa Chadwick-Dunn, and Chris Clark, CFA.

RS Investments adds to Vanguard’s roster of external investment advisory firms, which now total 30.

“Vanguard has a meaningful legacy in the world of active management, stretching back to the 1929 launch of the Wellington Fund,” says Vanguard CEO Bill McNabb. “We seek to select and retain the industry’s leading investment firms and we welcome the addition of Victory’s RS Investments team as a complement to our deep and broad roster of active managers.”

The investment objectives and principal investment strategies of the Mid-Cap Growth fund will remain the same, and Vanguard says it does not expect the expense ratio to be affected by the changes.

NEXT: LGIMA Launches New Scientific Beta Funds for Institutional Investors

LGIMA Launches New Scientific Beta Funds for Institutional Investors

The U.S. index fund management business of Legal & General Investment Management America (LGIMA) is moving forward with Scientific Beta Multi-factor strategies using commingled funds designed for institutional investors. The new funds will be aimed at defined benefit (DB), defined contribution (DC), Taft-Hartley, and public plans.

LGIMA will be launching four funds comprising the global, U.S., developed ex-U.S., and emerging market components of the Scientific Beta Multi-factor indices. These indices will initially have exposure to the low volatility, value, momentum and size factors. It will use weighting methodologies that seek to improve diversification and risk-adjusted returns relative to market-cap weighted indices.

"It’s a perfect marriage of LGIMA’s commingled fund platform that emphasizes a high level of governance, transparency and flexibility,” says Greg Behar, head of Index Strategy at LGIMA. “This marks the first time that U.S. investors will be able to access scientific beta’s academically-driven smart beta 2.0 methodology in a collective investment trust designed for institutional investors.” 

Noël Amenc, CEO of ERI Scientific Beta added, “At ERI Scientific Beta, we have long been emphasizing the importance of diversifying the specific risks of factor indices. Diversification has been described as the only ‘free lunch’ in finance, and it is crucial that investors who wish to avoid the levels of concentration of cap-weighted indices do not fall into the trap of choosing highly-concentrated smart beta indices instead on the pretext of being as highly exposed to factors as possible.” 

NEXT: American Century Investments Releases Emerging Opportunities Total Return Fund

American Century Investments Releases Emerging Opportunities Total Return Fund

AC Alternatives, from American Century Investments, has launched the Emerging Opportunities Total Return Fund. The fund is aimed at clients looking to diversify their fixed-income portfolios with securities that are tied to emerging markets. It is available in investor, institutional, A, R and R6 share classes.

"Our new total return fund is a benchmark-agnostic portfolio that tactically allocates among all [emerging market debt] EMD asset classes, including sovereigns and corporates, hard and local currency debt, currencies and derivatives," says EMD Head Marge Karner. "We strive to capture most of the upside in the EMD universe with only 50% to 75% of the volatility over the full business cycle. Our goal is to provide an alternative to clients seeking exposure to the full range of EMD asset classes with a focus on seeking strong risk-adjusted returns and on minimizing drawdowns."

A team of EMD experts utilizes a combination of top-down and bottom-up analysis to develop their views on emerging markets, as well as an integrated and quantitative investment process. The team focuses on delivering returns through enhanced attention to risk and stress testing of portfolios. Consequently, proprietary risk management and portfolio engineering tools are integrated into the daily portfolio management process.

According to Co-Chief Investment Officer David MacEwen, American Century Investments is committed to offering a solution-based product that aims to help clients navigate the complex EMD universe, while striving to actively manage downside risk.

"We believe emerging markets may account for roughly two thirds of global growth over the next few years, fueled by supportive demographics, the growing middle class and increasing incomes," says MacEwen. "Over the past few years, we've built an experienced team of EMD experts to manage our growing capabilities and to respond to our clients' evolving preferences."

For more information about the fund, visit

NEXT: MFS Launches 2060 TDF

MFS Launches 2060 TDF

MFS Investment Management has rolled out the MFS Lifetime 2060 Fund, the latest offering in its target-date funds (TDF) series. The fund is meant for younger workers in the defined contribution space who expect to have more than 40 working years ahead of them.

"Target-date funds are a compelling option for young savers because they provide a disciplined, systematic way to invest for retirement," says Ryan Mullen, senior managing director and head of MFS' Defined Contribution Investments business. "With a broad need to increase retirement savings across all generations, MFS is pleased to offer our longest-dated Lifetime Fund to the market. This fund will offer younger workers a chance to start investing today for a goal that is over four decades away."

This TDF is substantially invested in other MFS mutual funds. From inception, it will allocate a majority of its assets to U.S. and international stock funds. As the fund moves closer to its target date, it will follow a glide path decreasing exposure to stock funds and increasing exposure to fixed income funds. By 2060, it will seek total return through a combination of current income and capital appreciation. It will have an asset allocation aligned with that of the MFS Lifetime Income Fund.

MFS has offered its Lifetime target-date funds since 2005. Over time, MFS has enhanced the diversification among the underlying fund mix of equities, bonds and other non-correlated asset classes, and added funds with five-year increments to give investors options more closely aligned to their specific goals. Recently, the firm added several of its MFS Blended Research Funds as underlying investments in its Lifetime TDFs in an attempt to further enhance the funds' risk/reward profiles and lower overall expenses. MFS also added Class R6 shares to the Lifetime target-date fund lineup.

As of October 31, 2016, MFS manages more than $2.5 billion in the Lifetime Funds.