Deals & People June 17, 2014

Rocaton Adds 403(b) Expertise to Consulting Team

Diane Improta has joined Rocaton Investment Advisors' defined contribution (DC) leadership team as managing director, defined contribution consulting.
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In her new role, Improta joins the investment advisory consulting firm’s current DC leadership team of Chris Lyon, partner and head of defined contribution, and Jeri Savage, managing director, defined contribution research.

Improta was most recently a partner at Hewitt EnnisKnupp, where she was the 403(b) client practice leader and a member of the defined contribution leadership team. She worked there from 1998 through June 2014. Prior to that, she served as a consultant at both Segal Advisors and Evaluation Associates.

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“Diane’s reputation and knowledge of the 403(b) market, combined with her broader experience across plan types, make her an excellent complement to our team,” says the Norwalk, Connecticut-based Lyon. “We are particularly excited about the additional perspective she will bring to our current and future defined contribution clients.”

Rocaton offers investment advisory services to institutional investors, including defined benefit and defined contribution plan sponsors, health care and insurance companies, financial intermediaries, endowments and foundations, and private wealth clients.

Products June 16, 2014

J.P. Morgan Jumps into ETF Marketplace

J.P. Morgan has entered the exchange-traded fund (ETF) market through the launch of a geographically diverse suite of core equity ETFs called the Diversified Return ETFs.
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The firm says it has already released the first fund in the ETF series, named the JPMorgan Diversified Return Global Equity ETF (JPGE). The “strategic beta” fund is designed to be the foundation of a global equity portfolio, J.P. Morgan explains, with the added purpose of keeping clients invested and confident during periods of market volatility.  

The JPGE fund seeks global equity returns with reduced volatility by diversifying across regions and sectors, according to the fund’s prospectus and other explanatory documents. The JPGE fund considers multiple performance factors—value, size, momentum and low volatility—and seeks to track the FTSE Developed Diversified Factor Index, created in partnership with J.P. Morgan. As the firm explains, the index measures risk-adjusted returns by combining the four factors within a systematic risk framework designed to enhance the consistency of returns.

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J.P. Morgan says it is devoting significant time and resources to creating and launching new and innovative solutions for “the next phase of ETFs,” especially as ETFs evolve from their passive beginnings to include a wider range of strategies and methodologies. The firm says it hopes to provide the investment expertise and thoughtful solutions ETF investors “need now more than ever.”

ETFs are one of the fastest growing segments of the investment industry, according to financial research and analytics firm Cerulli Associates. The firm recently published data showing that investors have propelled U.S. ETF assets to $1.7 trillion, as of year-end 2013. Cerulli Associates projects the U.S. ETF market will continue to grow strongly and could surpass $4 trillion by 2017.  

J.P. Morgan joins the ETF market at a time that index-based ETF strategies have evolved from traditional index-tracking to more sophisticated approaches, often called “smart beta.” The label covers a wide and growing pool of varying strategies and ETFs, including funds with full active management, J.P. Morgan says. (See “A New Look at Old Beta.”)

Citing another financial research firm, Cogent Research, J.P. Morgan says more than half of institutional decisionmakers plan to increase their use of strategic beta ETFs over the next three years, with actively managed ETFs entering the market at an increasing rate. Investors appear to be attracted by the tax advantages, cost efficiencies and intraday liquidity associated with ETFs, the research shows.

J.P. Morgan says it is taking a dedicated, long-term approach to ETF management and is currently engaged in laying the groundwork for a full range of strategic beta and other ETF solutions. The firm envisions a next generation of ETFs that entail sophisticated strategies and require an investment manager with a deep research platform and experience capturing alpha.

More information on the JPGE fund, and the pending Diversified Return ETFs, is available here.

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