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The DWS Group has expanded its ESG product lineup with the launch of Xtrackers S&P 500 ESG ETF (SNPE), the first such ETF available for U.S. investors. (UBS launched a similar product for European investors in April.)
The underlying Index seeks to target 75% of the float market capitalization of each Global Industry Classification Standard Industry Group within the S&P 500 Index, using an ESG score as the defining characteristic, according to the fund's prospectus.
"By bringing this to the market we've given investors the ability to put ESG at the core of their portfolio where we see investing trends heading," said Luke Oliver, DWS head of index investing, Americas, in a statement. The fund has an expense ratio of 0.11%.
"We've priced it as a core holding and that speaks to the DWS commitment to ESG. This ETF was designed so investors can use it in place of core benchmarks," said Oliver.
The ETF excludes S&P 500 companies that are involved in the production or sale of tobacco or are engaged in the business of "controversial weapons," which it lists as cluster weapons, landmines, biological or chemical weapons, depleted uranium weapons, white phosphorus weapons and nuclear weapons, in its prospectus.
Also excluded are companies that fall within the bottom 5% of the United Nations Global Compact score ranking, or within the lowest 25% of ESG scores from each GICS Industry Group.
Principal Introduces Its First Interval Fund
Principal Global Investors launched its first interval fund, which is a type of closed-end fund that provides investors exposure to less liquid investments while repurchasing a percentage of investor shares quarterly.
The Principal Diversified Select Real Asset Fund invests primarily in private real assets, including infrastructure, natural resources, and real estate and conducts quarterly repurchase offers of 5% to 25% of the fund's outstanding shares as net asset value. (A higher level of repurchase offers can be allowed by the fund's board of trustees.)
"Throughout 2019, we have encouraged clients and investors to re-evaluate risk within their portfolios. Offerings like DSRA are designed to help investors address market uncertainty and volatility," said Mike Beer, executive director of Principal Funds.
According to Principal, the fund's managers take a longer term approach and avoid fire sales of assets at cheap prices during times of sudden, massive redemptions, which can help boost returns and investors gain access.
The new fund is available in three different share classes:
- A shares (PDSRX), minimum $25,000; 3.36% net expense ratio, 5.75% maximum sales charge
- I shares (PDSKX), minimum $100,000; 3.06% net expense ratio
- Y shares (PDSYX ), minimum $100,000 2.85% net expense ratio
Eaton Vance Announces Strategic Initiative Within Parametric Unit
Eaton Vance Corp. announced a strategic initiative within its Parametric Portfolio Associates LLC (Parametric) and Eaton Vance Management (EVM) investment affiliates to strengthen its rules-based, systematic investment strategies, customized individual separate accounts and wealth management solutions.
The initiative has three principal components:
- Rebranding EVM's rules-based, systematic investment-grade fixed income strategies as Parametric and aligning internal reporting consistent with the revised branding;
- Combining the technology and operating platforms supporting the individual separately managed account (SMA) businesses of Parametric and EVM; and
- Integrating the distribution teams serving Parametric and EVM clients and business partners in the registered investment advisor (RIA) and multi-family office (MFO) market.
Based on assets under management and fee revenue for the fiscal quarter ended April 30, 2019, $39.8 billion of systematically managed fixed income assets and associated annualized management fee revenue of $70.1 million will, over a transition period, transfer from EVM to Parametric.
On a pro forma basis, Parametric's managed assets will increase to $285.0 billion and its annualized management fee revenue will grow to $462.1 million, representing approximately 61% and 31%, respectively, of Eaton Vance's consolidated totals as of and for the fiscal quarter ended April 30, 2019.
Investments to support the company's growing individual SMA business and expanded distribution in the RIA/MFO channel are expected to be offset by increased revenue growth and cost savings resulting from greater operating efficiencies.
"By simplifying our brand architecture, strengthening our SMA operating infrastructure and expanding our distribution reach into the RIA and multi-family office marketplace, we expect to drive accelerated business growth for years to come," said Thomas E. Faust Jr., Eaton Vance chairman and CEO.
The strategic initiative being announced today will be implemented over the balance of 2019 and early 2020. Eaton Vance does not expect the initiative to result in reduced headcount.
Oranj Unifies Trading and Rebalancing Technology Under a Single Platform
More than two years after Oranj acquired a majority interest in the TradeWarrior trading and rebalancing technology, the company has fully integrated TradeWarrior within the Oranj platform at no additional cost.
During the interim, Oranj fired the former CEO of TradeWarrior who subsequently sued; Oranj countersued; and now both parties appear to be moving on.
