Investment Products and Service Launches

Prudential Reduces Fees on Mutual Funds; Beaumont Capital Management Releases Smart Beta Series; Ivy Launches NextShares Exchange-Traded Managed Funds; and more
Prudential Reduces Fees on Mutual Funds

Prudential Investments is reducing expenses on a number of its mutual funds including the Prudential Total Return Bond Fund with $17.1 billion in net assets. The firm says it’s also reducing fees for the Prudential Global Total Return Fund.

“Our ongoing evaluation of expenses underscores our commitment to delivering performance and value to shareholders,” says Stuart Parker, president of Prudential Investments.

In the past five years, Prudential Investments has administered several fee reductions, passing along $30.2 million in savings to investors through August 31, 2016, the firm says.

The net operating expense is without dividend expenses on short positions.   

Prudential Investments is the mutual fund group of PGIM, a global investment manager with more than $1 trillion in assets under management (AUM) and the global investment management business of Prudential Financial.

NEXT: Beaumont Capital Management Releases Smart Beta Series

Beaumont Capital Management Releases Smart Beta Series

Beaumont Capital Management (BCM), a provider of ETF-based solutions, has launched its BCM Paradigm Series of smart beta funds.

The offering includes the BCM Paradigm Tactical Fixed Income fund and the BCM Paradigm Tactical Factor Selection fund. Both aim for risk-adjusted return with downside protection by using rules-based analysis of investor behavior and by detecting shifts between “normal” and “volatile” markets.

BCM’s process involves evaluating relative and absolute levels of ETF’s volatility before categorizing them as “normal” or “volatile.” The normal candidates are then allocated based upon their relative attractiveness, which leads to the construction of a portfolio seeking positive returns, while minimizing volatility and drawdown, the firm says. The strategies’ quantitative models analyze each ETF for inclusion in the portfolio daily and rebalances typically occur weekly.

“Lots of smart beta, or factor-based ETFs, have been launched recently, but few strategies, in our opinion, seek to use these products in a constructive way,” says Eric Biegeleisen, BCM’s director of Quantitative Research and portfolio manager of the Paradigm strategies. “With Paradigm, we are striving to use smart beta to pursue alpha.”

BCM says its smart beta strategy is consistent with its philosophy to provide relative returns during upmarkets while providing protection capabilities during market shifts.

“True to its name, the BCM Paradigm Series seeks to identify subtle, but important changes in behaviors, to gain an early indication of dramatic market shifts,” says Bob Peatman, BCM’s director of National Sales. “We believe this approach is particularly relevant for all types of investors in today’s complex and volatile markets. When used together, the Paradigm strategies offer a portfolio solution that seeks to balance core equity and fixed income needs for growth, with defensive versatility and overall stability.”

NEXT: Ivy Launches NextShares Exchange-Traded Managed Funds

Ivy Launches NextShares Exchange-Traded Managed Funds

Ivy Investment Management Company has launched its first three Ivy NextShares as part of a planned lineup of these exchange-traded managed funds.

“NextShares represent another step in our effort to provide clients with unique, progressive investment products,” says Thomas W. Butch, president and CEO of Ivy Distributors. “We are pleased to be one of the first firms to bring them to market. Ivy NextShares offer the potential for competitive investment returns by applying the strength of Ivy’s experienced portfolio managers and proprietary investment research in a cost-effective and tax-effective structure.”

The Ivy Energy NextShares invests at least 80% of its net assets in securities of companies within all aspects of the energy sector including exploration, discovery, production and distribution or infrastructure of energy and/or alternative energy sources. The portfolio typically will hold 50 to 65 stocks. It is managed by veteran portfolio manager David P. Ginther, CPA, senior vice president of IICO, and Michael T. Wolverton, CFA, vice president of IICO.

Ivy Focused Growth NextShares will invest primarily in a portfolio of common stocks issued by large capitalization, growth-oriented companies that the manager believes have the ability to sustain growth for the long term. The portfolio typically will maintain a limited number of stocks, generally 15 to 25, the firm says. It is managed by veteran portfolio manager Daniel P. Becker, CFA, senior vice president of IICO; and Bradley M. Klapmeyer, CFA, vice president of IICO.

Ivy Focused Value NextShares is designed to invest primarily in the common stocks of companies that the manager believes are undervalued, trading at a significant discount relative to the intrinsic value of the company as estimated by IICO and/or are out of favor in the financial markets, but have a favorable outlook for capital appreciation. The portfolio typically will maintain a limited number of stocks, generally 15 to 25. It will be managed by veteran portfolio manager Matthew T. Norris, CFA, senior vice president of IICO.

“We congratulate Ivy on the launch of their three NextShares funds,” says Stephen W. Clarke, president of NextShares Solutions, LLC. “Ivy is leading the evolution of active fund investing to a potentially better-performing, lower cost and more tax efficient structure.”

NextShares are currently available through online brokerage services Folio Investing and Folio Institutional. Interactive Brokers Group, an automated global electronic broker and market maker; and Envestnet, a provider of unified wealth management technology and services, have both announced their intentions to make NextShares available on their platforms in the near term. In July 2016, UBS Financial Services announced plans to become the first full-service wealth manager to offer NextShares through its financial adviser network in early 2017.

NEXT: RBC Correspondent Services Offers New ETF Model Portfolios from State Street

RBC Correspondent Services Offers New ETF Model Portfolios from State Street 

State Street Global Advisors (SSGA) soon will make its new suite of five risk-based, custom exchange-traded fund (ETF) models available to clients of RBC Correspondent Services (RBC CS). The ETFs will be delivered through NextCapital’s open-architecture digital advice platform. 

Each model will contain eight to 12 SPDR ETFs with investment minimums of $5,000. The custom model ETF portfolios are designed and maintained by SSGA’s Investment Solutions Group, a team of more than 75 investment professionals managing more than $180 billion in assets.

“The robo-advisory landscape is quickly evolving, and we are thrilled to be leading the effort to deliver innovative investment options to RBC’s correspondent firms,” says Nick Good, co-head of the Global SPDR business at State Street Global Advisors. “The combination of SSGA’s thought leadership in portfolio construction and NextCapital’s market leading technology will deliver a compelling and seamless user experience.”

The model portfolios will consist of ETFs from the RBC CS No-Transaction Fee ETF program. 
Earlier this year, SSGA and RBC CS announced the launch of No-Transaction Fee (NTF) ETF program, which allows correspondent firms to diversify their clients into broad market segments.

“With these new ETF portfolios available through NextCapital’s digital advice platform, RBC CS firms will be able to offer personalized, managed accounts with well diversified portfolios," said Dirk Quayle, president of NextCapital. 

SPDR ETFs span an array of international and domestic asset classes. These are managed by SSGA Funds Management, a registered investment adviser (RIA) and wholly-owned subsidiary of State Street Corporation. 

State Street Global Advisors is the investment management arm of State Street Corporation.

RBC Correspondent Services is a clearing provider in the United States specializing in providing clearing, custody and execution services to independent broker dealers and their advisers.