Vanguard Cuts Fees on 7 Funds: Portfolio Products

Pimco Launches RAFI ESG U.S. ETF

Pimco introduced the RAFI ESG U.S. ETF, which the company said is benchmarked to the RAFI ESG US Index and "seeks to outperform market capitalization weighted indices, while investing in" environmental, social and governance-conscious companies.

The fund has a net expense ratio of 0.29% and uses Research Affiliates' Fundamental Index approach that weights stocks by economic size instead of by market capitalization, and was "built on the principles of contrarian investing and disciplined rebalancing, offering the potential for improved returns," Pimco said. That's "paired with Research Affiliates' unique approach to ESG, investing in ESG-conscious companies as well as incorporating two additional metrics linked to improved return potential — financial discipline and diversity," Pimco said.

The new Pimco ETF "marries the performance potential of fundamental indexing with a unique approach to ESG, helping to drive the potential for improved returns over the broader market and social responsibility for investors," according to Andrew Pyne, executive vice president and strategist focused on Pimco's equity solutions.

Chubb's New Bond Addresses Risks Faced by Asset Managers

Chubb introduced a new fidelity insurance solution, the Financial Institution Bond for Asset Managers, that it said was designed to address the unique range of risks faced by today's asset managers that are associated with advancements in technology they use to manage assets.

The new bond provides modernized coverage for a variety of risks that can result in loss of customer capital. "These types of risks often stem from fraudulent activities of employees, computer hacking and impersonation of executives, clients, and counterparties," Chubb said.

Chubb's solution "provides an extra layer of protection for exposures that may not be covered under existing policies," including financial loss resulting from unauthorized access to the firm's computer systems by hackers, including the use of malware and viruses; unauthorized access to a firm's network, including mobile applications and customer web portals; the transfer of the firm's capital or its customers' capital through fraudulent instructions over the internet, email or telephone; and, impersonation of an employee or known vendor that causes the firm's funds to be fraudulently transferred by an authorized employee, it said.

"The asset management industry is growing at a rapid pace, and safeguarding customer capital is top of mind for asset managers," according to Michael Mollica, executive vice president of Chubb North America Financial Lines. "Given today's digital environment, it has never been more critical for asset management firms to ensure they have the right coverage in place to address a range of new risks," he said in a statement.

IndexIQ Partners With Candriam on 2 New ESG ETFs

IndexIQ teamed with fellow New York Life Investments subsidiary Candriam to introduce two new ESG ETFs: the IQ Candriam ESG US Equity ETF (IQSU, with a 0.09% net expense ratio) and IQ Candriam ESG International Equity ETF (IQSI, 0.15% net expense ratio).

The ETFs track indexes that offer broad market exposure to large- and medium-cap companies that satisfy ESG criteria developed by Candriam that, like IndexIQ, is a boutique and global multi-specialist asset manager.

"As U.S. investors become increasingly interested in sustainable investing, high-quality ESG strategies with the potential to generate alpha are at a premium," according to David Czupryna, head of ESG client portfolio management at Candriam.

Pacer ETFs Makes Its First Acquisition of Existing ETF

Pacer ETFs continued its expansion with its first acquisition of an existing ETF, the American Energy Independence ETF from SL Advisors. The purchase price wasn't provided.

The AEI ETF has been renamed the Pacer American Energy Independence ETF and has total annual expenses of 0.75%.

The fund provides investors with "exposure to the growth potential of infrastructure development supporting domestic energy supplies," according to Pacer ETFs, which said it surpassed $5 billion in assets under management in October, a milestone that it achieved in just four years.

— Check out last week's portfolio product roundup here: T. Rowe Price Introduces China Evolution Equity Fund: Portfolio Products.