Products March 3, 2016

Investment Product and Service Launches

Northern Trust subsidiary joins forces with alternatives specialist Aurora Investment Management; Vanguard Launches international high-dividend yield index fund and dividend appreciation index fund.  
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50 South Capital Advisors to Acquire Aurora Investment Management

50 South Capital Advisors, an investment advisory subsidiary of Northern Trust Corporation, announced the pending acquisition of the investment management business of Aurora Investment Management, a subsidiary of Natixis Global Asset Management.

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According to the firms, the addition of Aurora to the Northern Trust Corporation family of companies will offer clients of both firms access to an “expanded global alternative investment platform with the size and resources to deliver comprehensive hedge fund, private equity and real asset solutions.”

“This strategic acquisition supports our objective as a trusted asset manager to provide solutions that are suited to client investment objectives and risk tolerances,” explains Northern Trust Chairman and Chief Executive Officer Frederick Waddell. “We are pleased to take this step and significantly grow our alternative investment capabilities to help investors meet the challenges of high volatility and persistent low yields in financial markets.”

Roxanne Martino, CEO of Aurora, adds that the cultures of 50 South Capital and Northern Trust are a good fit and should drive “highly complementary investment capabilities and …  a strong platform for growth.”

For nearly 30 years, Aurora has been a manager of hedge fund strategies, “with expertise in seeding and co-investing with investment managers and a strong base of high net worth and institutional investors, including corporate and public pension funds, foundations and endowments, insurance companies and health care organizations.”

The combination will significantly expand 50 South Capital’s alternative investment capabilities with the addition of the Aurora investment team that averages more than 20 years of investment experience and brings new capabilities in emerging manager, co-investment and liquid alternatives strategies.

The acquisition is subject to customary closing conditions and is anticipated to close in the third quarter of 2016. For more information, visit www.50SouthCapital.com.

NEXT: Vanguard adds to index fund lineup 

Vanguard Launches Two New Index Funds  

Vanguard launched the firm’s first two dividend-oriented international index funds, featuring low-cost mutual fund and ETF shares.

The new funds are the Vanguard International High Dividend Yield Index Fund and the Vanguard International Dividend Appreciation Index Fund.

Vanguard explains the International High Dividend Yield Index Fund follows an income investing strategy, focusing on companies with high dividend yields. The fund will “seek to track the FTSE All-World ex US High Dividend Yield Index, a benchmark of more than 800 of the highest yielding large- and mid-cap developed and emerging markets securities.”

The International Dividend Appreciation Index Fund emphasizes stocks “exhibiting dividend growth and seeks to track the Nasdaq International Dividend Achievers Select Index, which comprises more than 200 all-cap developed and emerging markets stocks with a track record of increasing annual dividend payments.”

The funds are available to retirement plans and offer three low-cost share classes, including exchange-traded fund (ETF) shares. For the International High Dividend Yield Index Fund, an initial investment of $3,000 will be assessed a 40-basis points fee, while $10,000 will make an investor eligible for a 30-basis points fee, either in a mutual fund or ETF wrapper. For the International Dividend Appreciation Index Fund, a minimum investment of $3,000 sets the fee at 35 basis points, decreasing to 25 basis points for investments above $10,000.

The firm says the new funds “will complement Vanguard’s existing domestic dividend-oriented index funds: The $16 billion Vanguard High Dividend Yield Index Fund and the $23 billion Vanguard Dividend Appreciation Index Fund.”

For more information, visit www.vanguard.com. 

Diversions March 3, 2016

In 30 Years People May Not Have to Work

Will those out of work be content to live a life of leisure? Can the global economy adapt to unemployment that’s greater than 50%?
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Rice University computer scientist Moshe Vardi expects that within 30 years machines will be capable of doing almost any job that a human now can.

“We are approaching a time when machines will be able to outperform humans at almost any task,” Vardi says. “I believe that society needs to confront this question before it is upon us.”

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Vardi—a member of the National Academy of Engineering and the National Academy of Science who holds several distinguished titles at Rice University—maintains that the advancement of artificial intelligence (AI) is increasing even as existing robotic and AI technologies eliminate middle-class jobs.

He does add some people believe that future advances in automation will ultimately benefit humans, just as automation has benefited society since the dawn of the industrial age.

But even if the global economic system can be restructured to enable billions of people to live leisurely, without work, Vardi questions whether it would benefit humanity. “Humanity is about to face perhaps its greatest challenge ever, which is finding meaning in life after the end of ‘In the sweat of thy face shalt thou eat bread,’” he says. Before human labor becomes obsolete, Vardi says we’ll need to rise to the occasion and meet this challenge.

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