New products introduced over the last week include two municipal-bond funds from PIMCO, an emerging-markets bond fund from T. Rowe Price (TROW); and Global X launched an ETF drawing on the decisions of hedge-fund managers
There is also an indexed annuity offering a chronic care benefit from the Phoenix Companies, five new volatility-weighted indexes from Compass Efficient Model Portfolios, as well as retirement-income solutions from Achaean Financial. In addition, Bregal Investments formed a new private equity fund.
Here are the latest developments of interest to advisors:
1) PIMCO Announced Launch of Two New Funds
PIMCO announced Wednesday that it has launched two new municipal bond funds, the PIMCO California Municipal Bond Fund (PCTIX) and the PIMCO National Intermediate Municipal Bond Fund (PMNIX). Both will be managed by Joe Deane, the New York-based head of PIMCO's municipal bond portfolio management.
PCTIX, which will use as its benchmark the Barclays Capital California Municipal Bond Index, may invest its assets in California debt securities exempt from regular federal income tax and California income tax, with an average duration of 7–12 years. Its management fee will be 44 basis points for institutional shares.
PMNIX's benchmark is the Barclays Capital Municipal Bond 1-20 Year Blend (1-22) Index; this fund will invest mostly in tax-exempt bonds from state and local governments across the country, with an average duration of 3–9 years. Its management fee will be 45 basis points.
2) T. Rowe Price Launches Third Emerging Markets Bond Fund
T. Rowe Price announced Tuesday that it has launched the Emerging Markets Corporate Bond Fund (TRECX). It offers investors access to the distinct subsets of emerging market debt in three separate funds. It is available through a no-load mutual fund or advisor-class shares (PACEX) available through financial advisors. This fund involves a high-risk approach to income from foreign bonds, and its share price could fluctuate significantly. It is subject to risks unique to international investing, such as liquidity risks, as well as credit and interest rate risks normally associated with investing in bonds.
TRECX, managed by Mike Conelius, the second-longest tenured emerging markets bond fund manager with 23 years of experience, offers diversification across more than 30 countries in Asia, Latin America, Europe, the Middle East and Africa. With approximately 50% of its assets in investment-grade bonds, it can purchase bonds of any credit quality.
It has an approximate duration of five years, and will invest primarily in bonds issued in U.S. dollars, but may also hold bonds issued in emerging-market currencies and other non-U.S. currencies.
The minimum initial investment in TRECX and PACEX is $2,500 or $1,000 for retirement plans or gifts or transfers to minors (UGMA/UTMA) accounts. The net expense ratio is estimated to be 1.15% for investor-class shares and 1.25% for advisor-class shares.
3) Global X Funds Launches the Global X Top Guru Holdings Index ETF
Global X Funds announced Tuesday that it has launched the Global X Top Guru Holdings Index ETF (GURU), which allows investors to tap into the combined expertise of the largest hedge fund managers. On a quarterly basis, all hedge funds with more than $100 million in U.S. equity investments are required to publish their holdings in a publicly available document called the 13F.
The goal of GURU is to aggregate on a quarterly basis the expertise and knowledge of hedge fund managers into the format of an ETF—with no minimum investment, immediate liquidity and a 0.75% expense ratio. The Top Guru Holdings Index uses a proprietary methodology to compile the highest conviction ideas from a select pool of hedge funds where the 13F information is most valuable. Hedge funds with high turnover and non-concentrated positions are eliminated from the pool. GURU is designed to rebalance quarterly in accordance with the 13F reports to capture any significant position changes.
4) The Phoenix Cos. Launches New Chronic Care Annuity
The Phoenix Cos. announced on June 4 the introduction of the Protected Solutions Annuity, developed through its strategic alliance with the AltiSure Group.
