Investment Products and Services

ERI Scientific Beta Presents Long/Short Equity Market Index; TD Ameritrade Offers Expanded Commission-Free ETF Program; State Street Global Advisors Launches New SPDR Portfolio ETFs; and more. 

ERI Scientific Beta Presents Long/Short Equity Market Index

ERI Scientific Beta announced the launch of a long/short equity market neutral index, the Scientific Beta Developed Multi-Beta Multi-Strategy Managed Volatility L/S Equity Market Neutral Index (x3.5).

The objective of the index is to seek exposure to long-term rewarded factors and a reduction in non-rewarded risks, which associates the factor exposure with good risk-adjusted performance, while at the same time aiming for market neutrality within a universe of large and mid-capitalization companies from developed countries. The allocation across smart factor indices is implemented with the goal of minimizing the volatility of the long/short spread. Return amplification is obtained by the use of 3.5x leverage, maintaining volatility below 8%.

While long/short multi-factor strategies will, by construction, harvest long-term factor premia, such strategies may expose investors to unintended risks due to poor diversification. This risk is all the greater in that long/short strategy providers seek to maximize each factor’s spread through in-sample optimizations that lack robustness, because the selected factor champions are not persistent out of sample. This factor concentration also leads to highly unstable market beta, because the factors naturally exhibit high levels of beta conditionality.

Commenting on the launch, Noël Amenc, CEO of ERI Scientific Beta, says, “Scientific Beta’s long/short offering corresponds to its investment philosophy: risk management, factor diversification and top-down implementation. The portfolio construction methodology prioritizes risk management, which guarantees the robustness of out-of-sample performance. It diversifies across multiple factors to benefit from low correlations across factors rather than concentration in factor champions, which lack consistency and are a source of unstable performance and high turnover. The long/short solution is implemented in a top-down manner to allow dynamic allocation across factors, guarantee transparency and facilitate the search for market beta neutrality.”

Scientific Beta implements its long/short strategy through a short position in the cap-weighted reference index and a quarterly allocation to sub-portfolios in the long leg with the objective of minimizing the volatility of the long/short spread under the constraint of factor exposure positivity, diversification across factor indices and market beta neutrality. The long leg sub-portfolios are designed to efficiently capture the long-run factor risk premia that have been documented as being associated with factor tilts (value, momentum, low volatility, high profitability, and low investment).

NEXT: TD Ameritrade Offers Expanded Commission-Free ETF Program

TD Ameritrade announced an expansion of its commission-free exchange-traded funds (ETF) trading program, tripling the number of ETFs to 296 from 100, effective October 17. The firm contends it will offer the most commission-free ETFs in the industry, as well as the largest selection of non-proprietary, commission-free ETFs. 

Through the upgraded TD Ameritrade commission-free ETF program, registered investment adviser (RIA) and individual investor clients will have access to non-proprietary, low-cost ETFs from eight providers, including AGFiQ QuantShares; First Trust Portfolios; iShares ETFs; J.P. Morgan Asset Management; PowerShares by Invesco; ProShares; State Street Global Advisors; and WisdomTree.

TD Ameritrade will allow all of its clients to buy and sell commission-free ETFs that cover 77 Morningstar categories; provide increased sector and commodity coverage; and include low-cost ETFs in 15 core investment strategies from State Street Global Advisors’ SPDR Business. 

“Clients asked us for greater choice and a wider variety of high-quality, commission-free ETFs. We’re delivering in a big way: we’ve assembled the largest list of commission-free ETFs in the business, while still retaining our open-architecture approach, with no proprietary ETFs,” says Jim Dario, managing director of product management for TD Ameritrade Institutional. “The new platform will feature some of the biggest names in the ETF industry, with ETFs selected to cover a range of investment strategies and enable investors and advisers to create tailored, diversified portfolios.” 

For a complete ETF list, please visit here

NEXT: State Street Global Advisors Launches New SPDR Portfolio ETFs

State Street Global Advisors (SSGA) has announced the launch of SPDR Portfolio ETFs, a suite of 15 ultra-low-cost ETFs that provide access to a wide range of equity and fixed income asset classes to help investors meet their goals. 

Comprising 15 existing funds, including three that will track new indices, and with over $11 billion in existing assets under management, the SPDR Portfolio ETFs include: 

New Name and Ticker 

New Total Expense Ratio 

SPDR Portfolio Total Stock Market ETF (SPTM) 


SPDR Portfolio Large Cap ETF (SPLG) 


SPDR Portfolio Mid Cap ETF (SPMD) 


SPDR Portfolio Small Cap ETF (SPSM) 


SPDR Portfolio S&P 500® Growth ETF (SPYG) 


SPDR Portfolio S&P 500 Value ETF (SPYV) 


SPDR Portfolio S&P 500 High Dividend ETF (SPYD) 


SPDR Portfolio World ex-US ETF (SPDW) 


SPDR Portfolio Emerging Markets ETF (SPEM) 


"Each fund in the SPDR Portfolio suite is priced equal to or below the lowest fee ETF in the category," says Rory Tobin, co-head of the Global SPDR business at SSGA. “Some of these changes in price are significant - such as offering Emerging Markets exposure at 11 basis points. In addition, these funds have a combined total of over $11 billion in assets and trade actively, so there is no incubation period needed." 

The launch of SPDR Portfolio ETFs coincides with the launch of TD Ameritrade’s newly expanded ETF Market Center. The 15 SPDR portfolio ETFs will all be available to purchase commission free on TD Ameritrade’s ETF Market Center. 

The suite of SPDR Portfolio ETFs will provide investors access to a broad range of asset classes to assist in the construction of a core portfolio strategy, including fixed income, domestic equity, emerging market and international equity. 

SSGA also announced changes to the names and tickers of the 15 ETFs now included in the suite of SPDR Portfolio ETFs.

Coinciding with the launch of the SPDR Portfolio ETF suite, SSGA is introducing three new proprietary indices to provide investors with diversified exposure to the U.S. large cap market, U.S. small cap market and the total U.S. equity market, encompassing stocks of all market capitalizations. The following index changes are effective November 16, 2017.  

Fund Name and Ticker 

Previous Benchmark Index 

New Benchmark Index 

SPDR Portfolio Total Stock Market ETF (SPTM) 

Russell 3000 Index 

SSGA Total Stock Market Index 

SPDR Portfolio Large Cap ETF (SPLG) 

Russell 1000 Index 

SSGA Large Cap Index 

SPDR Portfolio Small Cap ETF (SPSM) 

Russell 2000 Index 

SSGA Small Cap Index 

For more information, please visit here.

NEXT: Endowment Wealth Management Premieres “Unicorn” Fund

Endowment Wealth Management, Inc. has announced the launch of its EWM Unicorn Technology Fund. The private fund is seeking to raise up to $25 million to capitalize on what its management team sees as opportunities in the secondary market for private, late-stage venture capital technology companies. Such firms are often referred to as unicorns due to their rarity and size.

The fund manager will seek to build a diversified portfolio of companies that it believes may experience a liquidity event in the next two to four years. The Unicorn Technology Fund is currently fully invested across six such companies and the manager intends to add additional investments as the fund grows.

"The Unicorn Technology Fund was created to leverage the experience of the management team and knowledge in the venture capital and secondary market space,” says Prateek Mehrotra, chief investment officer of Endowment Wealth Management. “Late-stage venture capital investing is not about seeking home runs- it's about capturing a bump in valuation that can often occur when a firm is acquired or goes public. Such investing is not without risk. We think that some of this risk can be mitigated by buying a diversified portfolio of established companies, being selective, and by seeking to acquire shares at prices discounted from the respective companies' last round of financing.”

The Unicorn Technology Fund is available only for accredited investors meeting certain income and net worth requirements.

NEXT: FS Investments Introduces Open-End Mutual Fund

FS Investments has announced the launch of its first open-end mutual fund, FS Multi-Strategy Alternatives Fund (Tickers: FSMSX (Class I), FSMMX (Class A)). The fund seeks to generate absolute returns with low correlation to traditional investments over a complete market cycle, and combines hedge fund managers and alternative beta strategies.

"FS Investments always looks for differentiated ways to help investors access alternative sources of returns," says Michael Forman, chairman and chief executive officer of FS Investments. "FS Multi-Strategy Alternatives Fund was created to provide exposure to an investment approach employed by some of the most successful institutional investors. We are excited to bring this solution to the broader investing public and do so in a daily liquid, transparent fund."

FS Multi-Strategy Alternatives Fund uses a hybrid investment approach, linking traditional hedge fund managers that can provide the potential for skill-based outperformance with beta strategies that seek to capture alternative sources of return across asset classes.

FS Investments has selected Wilshire Associates Incorporated as the fund's primary sub-adviser. 

"This hybrid approach has redefined what a core alternatives allocation should be," says Greg Bassuk, head of Liquid Alternative Strategies at FS Investments. "With this new fund, FS Investments provides a single fund solution that leverages Wilshire's leading hedge fund and alternative beta due diligence, asset allocation, rebalancing and risk management capabilities with FS Investments' expertise in thoughtfully designing and delivering an institutional-quality product to individual investors."

For further information regarding the fund please visit here.  

NEXT: Vanguard Selects Wellington to Manage Global Balanced Funds

Vanguard has launched two actively managed global balanced funds: Global Wellington Fund and Global Wellesley Income Fund, and has appointed long-time investment advisory partner Wellington Management Company LLP to manage the new funds. 

Global Wellington Fund will seek to provide long-term capital appreciation and moderate current income by offering a globally diversified portfolio invested in both equities and fixed income securities. The Global Wellington Fund will have approximately 65% of assets invested in U.S. and non-U.S. equities and 35% of assets invested in U.S. and non-U.S. fixed income securities. The Global Wellesley Income Fund will take a more conservative approach in primary pursuit of a high and sustainable level of current income, along with moderate long-term capital appreciation. Approximately 65% of its portfolio will be allocated to U.S. and non-U.S. fixed income securities and 35% to U.S. and non-U.S. equities.

“We will adhere to the same long-term, disciplined, balanced approach that has served Wellington and Wellesley fund shareholders well over decades, with the additional diversification benefits of global exposure,” says John Keogh, portfolio manager for the fixed income portions of the new global funds. “In our stock selection, we will focus on high-quality global companies with attractive valuations; in our bond approach, we will emphasize high-quality global corporate and government debt.”

Global Wellington Fund offers Investor Shares with an estimated expense ratio of 0.45%, and Admiral Shares with an estimated expense ratio of 0.35%. Global Wellesley Income Fund offers Investor Shares with an estimated expense ratio of 0.42%, and Admiral Shares with an estimated expense ratio of 0.32%. Both funds have a minimum initial investment requirement of $3,000 for Investor Shares and $50,000 for the Admiral Shares. The initial subscription period for the new funds will run from October 18, 2017 through November 1, 2017. 

NEXT: Orion Partners with Asset Management Firms to Deliver Community Marketplace

Orion Advisor Services has announced Orion Communities, an interactive peer-to-peer exchange that allows Orion clients utilizing its “Eclipse” trading platform, along with other strategists, to share model portfolios with each other in an open-source platform. 

Orion has partnered with asset management firms Russell Investments, BlackRock, and CLS Investments, which will share their own models, portfolio building tools, market updates and commentaries with the Orion adviser community, with many being offered at zero charge for Orion clients on its “Eclipse” platform. 

“In a dynamic market, it is important for advisers to work together to offer the best possible investment solutions for their clients, and we recognized the market demand for a platform like Communities,” says Todd Clarke, managing director, NorthStar Financial Services Group, LLC, parent company to Orion. “With Communities, Orion is making it easier for advisers to access and leverage each other’s expertise, helping them diversify their practices and serve clients more efficiently.”­­

The trade review and execution is completed by each strategist firm, in accordance with existing trading processes. When a strategist shares it models on Communities, it uploads its agreement to the platform. The subscribing adviser interested in the models then signs off on the agreement and payment terms. Orion’s system helps support payments, but the strategists are responsible for negotiating the terms and exchange of payments.

Tax loss harvesting and asset location will continue to be optimized in Orion’s “Eclipse,” the firm’s platform which helps enable advisers to trade and rebalance portfolios in a tax efficient manner.

For more information about Orion Communities, please sign up for an informational webinar here.