Investment Products and Service Launches

Janus Capital Releases Fiduciary Focused Share Classes; TIAA adds Guaranteed Income Components to TDFs; Virtus Launches Municipal Bond ETF; and more.
Janus Capital Releases Fiduciary Focused Share Classes

Janus Capital Group announced it has filed with the Securities and Exchange Commission (SEC) to create two new share classes for intermediary distribution partners. The firm says these shares were designed to help them meet fiduciary responsibilities and compliance requirements under the Department of Labor (DOL)’s impending conflict of interest rule.

Share Classes P and Z are expected to be available in late March, pending requisite approvals.

P shares are designed to offer low cost of access to investors using mutual funds on a transaction basis, and they reflect a lower commission schedule than existing A shares on all purchases. The class includes a 25-basis-point (-bps) 12b-1 fee, similar to other firms’ newly launched “T Shares.” Janus notes these shares includes features designed to help intermediaries eliminate potential conflicts of interest that may arise in light of the DOL fiduciary rule.

Z shares, or “Clean Shares” are the lowest-cost share class offered to qualified and nonqualified retail accounts, Janus says. Z shares will not include any embedded commission option, 12b-1, or sub-transfer agent fees, which are typically paid to the intermediary. Essentially, Z only includes a management fee and other asset manager operational expenses.

These new share classes come as more and more firms remain fiduciary focused despite the uncertain future of the fiduciary rule under the administration of President Donald J. Trump.

NEXT: TIAA Adds Guaranteed Income Components to TDFs

TIAA Adds Guaranteed Income Components to TDFs

Custom Default Solutions will complement TIAA-CREF’s active and index lifecycle funds by adding a guaranteed income component through a custom target-date model structure, or by a model portfolio constructed to deliver a target level of income.

These custom solutions are based on Target Date Plus Models and Target Income Models. Plan sponsors and third-party consultants can select investment options and devise glide paths before assigning participants to these using TIAA’s recordkeeping platform.

“Lifetime income has been a central part of TIAA’s retirement plans since our founding, and we continue to look for innovative solutions to help deliver positive retirement outcomes for participants,” says Ron Pressman, CEO, TIAA Institutional Financial Services. “Our research shows that 72% of employees want guaranteed lifetime income. Yet, primarily through defaults, many new participants contribute to target-date funds [TDFs] without an income focus. We brought these two insights together to offer plan sponsors a way to help participants improve outcomes in retirement without increasing risk.”

Pressman adds, “To date, most target-date funds do a good job helping participants accumulate retirement savings. However, they don’t provide guaranteed lifetime income in retirement, which can leave many with the tough task of stretching a lump sum of retirement savings over the course of a retirement that potentially could last decades."

TIAA’s research shows that 49% of Americans say their retirement plan’s No. 1 goal should be to provide guaranteed monthly income in retirement, but 41% are unsure if their current plan provides an option for lifetime income.

NEXT: Virtus Launches Municipal Bond ETF 

Virtus Launches Municipal Bond ETF

Virtus ETF Solutions has partnered with Cumberland Advisors to roll out its new Virtus Cumberland Municipal Bond ETF (CUMB). The fund will aim to enhance total income return and capital appreciation by investing in a range of municipal bonds spanning local, state and federal sectors. The firm plans to place an emphasis on quality issues and the ability to favor shorter maturities in the face of rising interest rates.

“We believe the current market offers great value in municipal bonds, particularly in intermediate and longer maturity bonds, especially when compared with traditional valuations versus U.S. Treasurys,” says David Kotok, portfolio manager and chief investment officer (CIO) of Cumberland Advisors. “The Virtus Cumberland Municipal Bond ETF will give investors the opportunity to obtain total return and diversification in the municipal bond market while capitalizing on Cumberland’s 40 years of experience in bond management.”

Virtus notes its strategy emphasizes shorter-term and longer-term bonds to help the fund benefit from the steepness of the municipal yield curve, while capitalizing from moves in the municipal bond yield curve and municipal “centric events.”

Kotok leads the management of the fund along with John Mousseau, chief financial officer (CFA), director of fixed income and portfolio manager for Cumberland Advisors.

To learn more about the Virtus Cumberland Municipal Bond ETF, visit cumberetfs.

Virtus ETF Solutions is the multi-manager ETF sponsor and affiliate of Virtus Investment Partners.

NEXT: Franklin Templeton Rolls Out International ETF

Franklin Templeton Rolls Out International ETF

Franklin Templeton Investments has expanded its suite of exchange-traded funds (ETFs) by adding the actively managed international equity ETF. The Franklin Liberty Opportunities ETF (FLIO) offers investors access to international equity markets spanning beyond the U.S. and into developed, developing and frontier markets across sectors and capitalization, the firm says.

FLIO will be listed on NYSE Arca on January 27, the firm announced.

“The launch of Franklin Liberty International Opportunities ETF marks our first actively managed international ETF and continuing expansion of our LibertyShares offerings,” says Patrick O’Connor, global head of ETFs for Franklin Templeton Investments. “With over 75% of the world’s GDP [gross domestic product] coming from countries outside the U.S., investing internationally can provide portfolio diversification, which can reduce overall risk. As we believe successful international investing can benefit from combining a global investment perspective with local presence and insights, we are leveraging fundamental research from our local asset management and emerging markets teams around the world in managing this new ETF.”

The firm notes that the fund’s portfolio managers will strive to outperform their benchmarks while investing in major brands, intellectual property and local franchises. They will also execute low leverage to allow companies to capitalize on investment opportunities.

FLIO is co-managed by Stephen Dover, Chartered Financial Analyst (CFA), chief investment officer (CIO) for Franklin Templeton Local Asset Management and Templeton Emerging Markets Group; and Purav Jhaveri, CFA, managing director of investment strategy for the local asset management group. They build upon research and insight from more than 80 investment professionals throughout the firm’s 12 local asset management teams, as well as the more than 50 investment professionals from Templeton Emerging Markets Group for deeper analysis of emerging countries.

The Franklin LibertyShares platform offers a range of strategic beta and actively managed ETFs, which have more than $545 million in assets under management (AUM) as of January 24.

NEXT: Alger Revamps ESG Fund  

Alger Revamps ESG Fund

Fred Alger Management is revamping its environmental, social, governance (ESG)-focused fund by broadening its investment criteria. Formerly the Alger Green Fund, the Alger Responsible Investing Fund will be able to invest across all American industries, sectors, and market caps.

“We think innovative companies that embrace sustainable ESG practices can improve the bottom line for shareholders and broader society as well,” says Chris Walsh, Chartered Financial Analyst (CFA), portfolio manager of the fund. “These companies can have a positive impact across a range of factors including climate change, resource depletion, corporate board diversity and a long-term orientation to sustainable growth.”

The fund has also added Gregory Adams, CFA as portfolio manager alongside Walsh. Both will seek to identify growth-oriented companies conducting business in a responsible manner that reinforces positive ESG impact.

“The demand for ESG investing has increased in recent years, with many of our clients asking for ESG options,” says Alger Chief Investment Officer (CIO) and CEO Dan Chung, CFA. “Coincidental with this changing dynamic, Alger’s research team has increasingly identified more companies solving economic, social and environmental challenges that are benefiting from positive dynamic change. Alger’s investment approach is a natural fit for many investors seeking a mutual fund that identifies companies that are striving to achieve stronger ESG recognition.”