Deals & People July 6, 2023

Principal Joins Portability Services Network

Consortium now has representation from the country’s five largest plan sponsors.

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Principal Financial Group announced it has joined the Portability Services Network LLC, a consortium of retirement plan service providers seeking to help workers with lower balances transfer their workplace retirement accounts when changing employers.

The addition of Principal means the country’s five largest recordkeepers by assets are now part of the network, adding to Fidelity Investments, Empower, Vanguard and Alight Solutions, according to the latest ranking by PLANSPONSOR. After Empower joined in February, TIAA, the country’s largest 403(b) recordkeeper, joined the network in April.

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As a board member and one of seven owning members of PSN, Principal will utilize the auto-portability solution developed by Retirement Clearinghouse, according to the announcement Thursday.

“As a retirement leader, it’s our responsibility and commitment to help create the best possible retirement outcomes for America’s workers, including making it easy for their retirement savings to move with them,” Teresa Hassara, Principal’s senior vice president for retirement and income solutions, said in a statement. “Being a part of the Portability Services Network adds another tool to the toolbox we have at Principal to support individuals on their paths to achieving financial security.”

By automating the process, the PSN hopes that workers will be able to transfer their assets into various retirement accounts such as 401(k), 401(a), 403(b) and 457 plans without unnecessary complications. This streamlined approach can reduce premature plan cash-outs and promote financial security, according to PSN.

“[Principal’s] leadership, action, and progress to increase financial access and inclusion will help more people benefit from auto-portability—in particular people of color, lower-income workers, and women, who have higher than average cash-out rates,” Robert Johnson, chairman of PSN and Retirement Clearinghouse, said in a statement.

PSN currently represents about 82 million workers across more than 185,000 employer-sponsored retirement plans. Principal brings an additional 11 million retirement plan participants and more than 46,000 plans to the coalition, according to the announcement.

The network is building a recordkeeper base even as the SECURE 2.0 Act of 2022 called on the Department of Labor to create a centralized retirement account “lost and found” for American workers. The DOL has said it is looking into the best approach to create this database.

Products July 6, 2023

Investment Product and Service Launches

BlackRock Debuts First Buffer ETFs; SMArtX Adds 15 Investment Strategies; Fidelity Refiles Spot Bitcoin ETF Application.

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BlackRock Debuts First Buffer ETFs With Launch of 2 Funds

BlackRock debuted its first buffer exchange-traded funds with the launch of the iShares Large Cap Moderate Buffer ETF and the iShares Large Cap Deep Buffer ETF.

iShares buffer ETFs seek to track the share price return of the iShares Core S&P 500 ETF (IVV) up to an approximate upside cap, while mitigating market downturns by seeking to provide an approximate buffer against IVV losses within target ranges.

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“iShares buffer ETFs unlock access to institutional-quality risk management solutions in the convenience of the ETF wrapper, helping investors play defense and, importantly, stay invested during turbulent market conditions,” Dominik Rohe, head of Americas ETF and index investments business at BlackRock, said in a statement.

SMArtX Adds 15 Investment Strategies

SMArtX Advisory Solutions announced it has added 15 strategies to its managed accounts platform. The platform now features 1,232 strategies from 294 asset management firms.

Among the new strategies are three from Blue Sky Asset Management’s Genfolio model portfolios, designed for active multi-asset allocation exposure, and ST Capital’s mid-cap value model portfolio. Stansberry Asset Management added seven strategies that collectively target a wide range of exposures across market capitalization and asset classes.

The SMArtX platform also now includes four additional strategies from existing asset management firms Argent Capital Management, Miller/Howard Investments, Scarecrow and T. Rowe Price.

Fidelity Refiles Spot Bitcoin ETF Application With SEC

Fidelity has refiled its Wise Origin Bitcoin Trust spot bitcoin exchange-traded fund with the Securities and Exchange Commission.

“To this point, the lack of a Spot Bitcoin [exchange-traded product] exposes U.S. investor assets to significant risk because investors that would otherwise seek crypto asset exposure through a Spot Bitcoin ETP are forced to find alternative exposure through generally riskier means,” the filing stated.

Fidelity first applied for a Bitcoin ETF in 2021 but was rejected. Last year, the firm announced the launch of a product that allowed workers to save 20% of retirement funds in Bitcoin.

BlackRock Inc. kicked off the refiling and amendments to Bitcoin ETFs from Fidelity and a number of other asset managers with its own refiling on June 15. Other asset managers that either refiled or amended applications were Ark Investment Management LLC, Invesco Ltd., WisdomTree Inc., Bitwise Asset Management and Valkyrie Funds.

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