Investment Product and Service Launches

Art by Jackson Epstein

WisdomTree Restructures European and Japan Equity Funds

WisdomTree, an exchange-traded fund (ETF) and exchange-traded product (ETP) sponsor and asset manager, has implemented changes for the WisdomTree Dynamic Currency Hedged Europe Equity Fund (DDEZ) and the WisdomTree Dynamic Currency Hedged Japan Equity Fund (DDJP).

As of April 2, both funds will transition to transparent, models-based actively managed multifactor strategies. The funds’ expense ratios remain unchanged.

According to WisdomTree, the WisdomTree Europe Multifactor Fund (EUMF), formerly the WisdomTree Dynamic Currency Hedged Europe Equity Fund (DDEZ), is a transparent, actively managed strategy, and invests in European equity securities that exhibit potential for returns based on proprietary measures of factors such as value, quality, momentum and correlation.

The WisdomTree Japan Multifactor Fund (JAMF) seeks to achieve income and capital appreciation through a transparent, actively managed strategy, and invests in Japanese equity securities exhibiting potential for returns based on proprietary measures of factors such as value, quality, momentum and correlation. 

“WisdomTree’s Modern Alpha approach to multifactor investing is designed to provide higher alpha potential with lower volatility and all the benefits of the ETF structure,” says Jeremy Schwartz, WisdomTree EVP and global head of research. “We continue to see value in this approach and are excited to expand our offerings with the restructuring of EUMF and JAMF.”

SSGA Builds Launches Sector Rotation SPDR ETFs

State Street Global Advisors (SSGA) launched two actively-managed, sector rotation SPDR exchange-traded funds (ETFs) with tactical allocation strategies. The SPDR SSGA US Sector Rotation ETF (XLSR) and SPDR SSGA Fixed Income Sector Rotation ETF (FISR) are managed by the firm’s Investment Solutions Group (ISG).

“These two new active ETFs highlight three key qualities of State Street Global Advisors – the power of ISG’s sophisticated tactical asset allocation, the world’s largest and most liquid suite of equity sector ETFs, and our experience in managing over $400 billion in fixed income assets,” says Noel Archard, global head of SPDR Product at State Street Global Advisors. “In bringing these attributes to a wider audience through our SPDR ETF family, we are providing clients with alpha-seeking solutions to enhance core portfolios.”

The SPDR SSGA US Sector Rotation ETF seeks to provide capital appreciation by overweighting or underweighting S&P 500 Sector ETFs based on ISG’s sector return forecasts and research, which includes a proprietary, quantitative sector selection model. ISG uses the model results and applies qualitative judgment to construct a portfolio of sector ETFs that seeks to maximize returns while meeting risk targets.

The SPDR SSGA Fixed Income Sector Rotation ETF seeks to provide total return by allocating yield-generating ETFs across the fixed income spectrum. FISR uses a tactical investment strategy based on ISG’s Fixed Income Sector Rotation Model, followed by fundamental review by the portfolio management team. The model provides views on the direction of rates and spreads across the maturity and credit quality spectrums.

Vanguard Files SEC Registration for Commodity Strategy Fund

Vanguard has filed a preliminary registration statement with the Securities and Exchange Commission (SEC) for the Vanguard Commodity Strategy Fund. The actively-managed fund, expected to launch in June , is said to offer investors added portfolio diversification, along with a potential hedge against inflation risk by investing primarily in commodities and treasury inflation protected securities (TIPS), according to Vanguard.

“The Commodity Strategy Fund will be a low-cost, broad-based option for advisers and institutional investors seeking additional diversification and inflation protection for a well-balanced portfolio,” says Matt Brancato, head of Vanguard’s Portfolio Review Department. “We believe the commodity exposure can serve as an effective inflation hedge and also provide value in mitigating stock and bond risks.” 

Vanguard’s new fund will offer Admiral Shares at a $50,000 investment minimum, with an estimated expense ratio of 0.20%.

The fund is seeking to outperform the Bloomberg Commodity Total Return Index by investing in commodity-linked derivative investments, such as commodity futures and swaps, collateralized by a mix of Treasury bills (T-bills) and short-term TIPS.

PineBridge Launches Fund Targeted to Domestic Equity Market in China  

PineBridge Investments, (PineBridge) has launched the PineBridge China A-Shares Quantitative Fund. The fund seeks to give global investors access to the domestic equity market in China through a quantitatively managed, active equity strategy that invests in equity and equity-related securities connected to the economic development of China. 

The fund is managed by PineBridge Investments Asia Ltd., with investment advice from Huatai-PineBridge Fund Management Co., an onshore Shanghai-based joint venture between PineBridge and Huatai Securities established in 2004.

“International index inclusion and continued economic liberalization in China are expected to drive substantial flows and increasing allocations towards China A-shares. The large and liquid domestic A-shares market aims to offer attractive, long-term return opportunities from China’s growth and innovation, and finding the most attractive stocks in this dynamic market requires an established local presence,” says Anik Sen, global head of Equities, PineBridge Investments. “The onshore universe presents extraordinary alpha opportunities and we are thrilled to bring investors the combination of PineBridge’s strength in Asia and Huatai-PineBridge’s investment expertise in Mainland China.”

The fund’s reference index, the MSCI China A International Total Return Net Index, reflects the set of China A-shares for the international investor taking into consideration the progressive A-share inclusion and foreign ownership limits.

“The further weight increase of A-shares in the MSCI indices is a significant milestone for the opening of China’s capital market,” says Jack Lin, managing director and APAC head of Client Coverage at MSCI, “We are pleased that PineBridge has chosen MSCI China A International Total Return Index as the reference benchmark for its new fund.”

The PineBridge China A-Shares Quantitative Fund is domiciled in Ireland and registered for sale across Europe.