Investment Products and Services Launches – PLANSPONSOR

Stadion Money Management announced that Swerdlin & Company has added the 401(k) managed account solution StoryLine to its daily-valued recordkeeping product offering. This new partnership continues Stadion’s focus on the regional recordkeeper channel.

StoryLine, built with SPDR exchange-traded funds (ETFs), is a retirement planning solution built specifically for 401(k) participants in adviser-sold plans. StoryLine offers plan-level customization, which Stadion sees as a distinct improvement over “one size fits all” target-date strategies.

The StoryLine process first seeks insight into the overall plan makeup with the intent of tailoring default options for each individual company. Then, with StoryLine’s participant-centric web interface, employees will be encouraged to further define their individual investment paths based on personal risk profiles, expectations, and goals. StoryLine will also allow—at the employee’s discretion—the inclusion of outside and spousal assets to facilitate more comprehensive retirement planning.

“The level of plan and participant customization available through StoryLine gives our advisers a new way to help their clients prepare for retirement,” comments Lee Swerdlin, president and chief operating officer of Swerdlin & Company.

Vanguard Offers First U.S. Actively Managed ETF Suite 

Vanguard has filed a registration statement for six new factor-based exchange-traded funds (ETFs) and one factor-based mutual fund, representing Vanguard’s first introduction of actively managed ETFs in the U.S. The company currently offers suites of active factor ETFs in Canada and the United Kingdom. The new factor funds are expected to begin trading in the first quarter of 2018. 

Five single factor funds are designed for financial advisers and institutional investors seeking to achieve specific risk or return objectives through targeted factor exposures: minimum volatility, value, momentum, liquidity, and quality. The sixth ETF will offer a multi-factor approach. Vanguard will employ an active, rules-based quantitative approach in managing the funds.

The new suite of active factor offerings includes:

  • Vanguard U.S. Minimum Volatility ETF – Seeks to provide long-term capital appreciation with lower volatility relative to the broad U.S. equity market.
  • Vanguard U.S. Value Factor ETF– Seeks to provide long-term capital appreciation by investing in stocks with relatively lower share prices relative to fundamental values.
  • Vanguard U.S. Momentum Factor ETF– Seeks to provide long-term capital appreciation by investing in stocks with strong recent performance. 
  • Vanguard U.S. Liquidity Factor ETF– Seeks to provide long-term capital appreciation by investing in stocks with lower measures of trading liquidity. 
  • Vanguard U.S. Quality Factor ETF– Seeks to provide long-term capital appreciation by investing in stocks with strong fundamentals.
  • Vanguard U.S. Multifactor ETF – Seeks to provide long-term capital appreciation by investing in stocks with relatively strong recent performance, strong fundamentals, and low prices relative to fundamentals.
  • Vanguard U.S. Multifactor Fund – Seeks to provide long-term capital appreciation by investing in stocks with relatively strong recent performance, strong fundamentals, and low prices relative to fundamentals. 

The five single factor-based ETFs will have an estimated expense ratio of 0.13%; the Multifactor ETF and Multifactor Fund will have an estimated expense ratio of 0.18%. The Multifactor Fund will require a minimum initial investment of $50,000 for Admiral Shares. 

Important to note, while factors have exhibited the potential for strong performance, there are a number of risks for investors to consider. Factor returns can be cyclical, and investors should be aware of the potential for periods of underperformance relative to the broad equity market.

AAM Enters U.S. ETF Market with New Dividend Funds

Advisors Asset Management (AAM) is entering the U.S. exchange-traded fund market with the launch of two dividend ETFs. The inaugural ETFs focus on income and value, seeking to help investors meet their current cash flow and future capital appreciation goals.

The AAM S&P 500 High Dividend Value ETF targets attractively valued U.S. large cap stocks that exhibit both a high dividend yield and sustainable dividend distribution characteristics. The AAM S&P Emerging Markets High Dividend Value ETF targets attractively valued emerging market stocks that exhibit both a high dividend yield and sustainable dividend distribution characteristics.

At the core of these solutions is the S&P Dividend and Free Cash Flow Yield Index series, which are designed to balance current cash flow with future capital growth. To accomplish this, the underlying index series focuses on two valuation indicators to identify sustainable dividend-paying stocks offering fundamental value: dividend yield and free cash flow yield.

In addition, the new ETFs target five stocks from each GICS sector, with the goal of providing investors a full range of sustainable dividend opportunities.

“There has been massive growth within the ETF industry and we are excited to be part of the ETF landscape. We have aligned ourselves with leading service providers, including S&P Dow Jones and The New York Stock Exchange, and are committed to offering specialized solutions to our financial adviser partners,” says AAM President Andrew Williams. “We will continue to provide offerings such as these ETFs to empower advisers to broaden their portfolios, while potentially meeting their clients’ income challenge.”

BNY Mellon Presents Multi-Asset Fund Equity Alternative

BNY Mellon Investment Management has launched BNY Mellon Insight Broad Opportunities Fund, a new multi-asset fund that invests across a wide range of asset classes using multiple investment strategies.

“BNY Mellon Insight Broad Opportunities Fund features dynamic asset allocation to limit volatility over a market cycle, which is typically five years.  The fund’s sub-adviser, Pareto Investment Management Limited, is part of Insight, a leading global investment manager,” says Joseph Moran, head of distribution at Dreyfus. “The new fund is a unique alternative to equities that strengthens our existing active line-up of alternative strategies.”

Insight’s Matthew Merritt, Steve Waddington and Michael Ford are the fund’s primary portfolio managers. They will allocate the fund’s assets among a broad range of asset classes, including equities, fixed income, currencies, real estate, listed infrastructure and commodities, in both developed and emerging markets. In seeking to provide a minimum average annual total return of USD 1-Month LIBOR plus 4.5% over rolling five year periods, the portfolio managers select investment strategies and asset classes based on their views of macroeconomic themes at the time of investment.

Insight’s Multi-Asset Strategy Group is comprised of ten investment professionals with an average of 17 years of industry experience in asset allocation, investment research, risk management and portfolio implementation.

“In combining directional and less directional strategies, BNY Mellon Insight Broad Opportunities Fund is designed to adapt to changing market conditions while providing investors with a portfolio that seeks to capture return and manage volatility,” says Matthew Merritt, head of the Multi-Asset Strategy Group at Insight Investment. “Having long provided multi-asset solutions to some of the world’s most sophisticated institutional investors, we are pleased to be bringing our expertise and process to a broader universe of investors.”

“This is the second mutual fund sub-advised by a subsidiary of Insight to be launched in the U.S and signals our broader ambition to bring a range of strategies to the U.S. marketplace,” says Svein Floden, head of Intermediary Distribution at Insight Investment. “It also demonstrates our ability to use complex and robust investment strategies into liquid and registered funds for US investors, a proposition which we believe helps us to stand out in this market.”

BNY Mellon’s Dreyfus Corporation serves as the investment manager of the fund, and MBSC Securities Corporation, a wholly owned subsidiary of Dreyfus, serves as the fund’s distributor. The fund is sub-advised by Pareto Investment Management Limited, an affiliate of Dreyfus and a wholly-owned subsidiary of Insight Investment Management Limited.

The fund offers Class A (DIOAX), Class C (DIOCX), and Class I (DIOIX) shares with a minimum initial investment of $1,000. The fund also offers Class Y (DIOYX) shares generally with a minimum initial investment of $1,000,000.  Additional information regarding the fund can be found on Dreyfus’ website at www.dreyfus.com.

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