Investment Product and Service Launches
Nuveen expands TDF solutions with new series; Avantis releases first bond ETF; Vanguard lowers minimum investment for target retirement funds; and more.
Nuveen Expands TDF Solutions With New Series
Nuveen, the global investment manager of TIAA, has expanded its target-date fund (TDF) solutions offering with the addition of the Nuveen TIAA Lifecycle Index CIT series.
The new collective investment trust (CIT) series will further complement the firm’s existing TDF suite, which includes an offering of active, passive and blended strategies. The trustee for the CIT is SEI Trust Co., a wholly owned subsidiary of SEI Investments Co. SEI maintains ultimate fiduciary authority over the management of and the investments made in the CIT, with Nuveen acting as the adviser.
With the launch of the Nuveen TIAA Lifecycle Index CIT series, the firm will now offer a passive target-date strategy in both mutual fund (TIAA-CREF Lifecycle Index Funds) and CIT solutions. The latest CIT series will also be managed by Nuveen’s mixed assets portfolio management team, which was recognized for its management of mutual funds for the fifth year in a row as the Best Mixed Assets Large Fund Company in the 2020 Refinitiv Lipper Fund Awards.
“At Nuveen, we are proactively looking for ways to meet the needs of plan sponsors and participants by enhancing our target-date fund suite with new strategies and products,” says Jeff Eng, managing director and head of retirement products at Nuveen. “Following the success of last year’s addition of a blended CIT series, the latest Nuveen TIAA Lifecycle Index CIT series is another step in our growth and evolution within the retirement market space.”
Last September, Nuveen also introduced 12 TDFs through the Nuveen TIAA Lifecycle Blend CIT series, which opportunistically blend active and passive investing strategies. The latest Nuveen TIAA Lifecycle Index CIT series consists of 13 funds, including 12 target-date funds at five-year intervals for retirement dates 2010 through 2065 and a retirement income fund for those who prefer a well-diversified, static asset allocation.
“From retirement regulation and legislation to the recent disruption of the global pandemic, the defined contribution [DC] market continues to evolve and address the demands and challenges faced by participants preparing for retirement,” says Brendan McCarthy, head of defined contribution investment only (DCIO) at Nuveen. “The CIT offering of our top performing target-date mutual funds strategy provides a solution that aims to help plan sponsors and their advisers achieve participant savings and income goals for a prolonged retirement period.”
Avantis Releases Municipal Bond ETF
Following the launch of its first two fixed-income exchange-traded funds (ETFs) in October, Avantis Investors has released its first low-cost, broadly diversified municipal bond ETF: Avantis Core Municipal Fixed Income (AVMU). AVMU joins Avantis Core Fixed Income (AVIG) and Avantis Short-Term Fixed Income (AVSF) in the brand’s fixed-income ETF lineup. All three strategies, listed on the New York Stock Exchange, are designed to seamlessly augment investors’ asset allocation.
“We’re very happy to add a municipal bond strategy to our new fixed-income lineup,” says Eduardo Repetto, Avantis chief investment officer (CIO). “We know clients are looking for well-designed, low-cost solutions that offer the potential benefit of current income with tax advantages to their investment portfolios.”
AVMU has an expense ratio of 0.15% and is expected to soon be offered as a mutual fund with an institutional class at the same total annual operating expense ratio.
The fund invests primarily in investment-grade-quality municipal debt obligations from a diverse group of issuers. The fund’s investment process uses an analytical framework, which includes an assessment of securities’ expected income and capital appreciation, to seek securities with high expected returns.
Similarly to Avantis’ other two fixed-income ETFs, AVMU will be co-managed by Repetto, Senior Portfolio Manager Hozef Arif, Senior Portfolio Manager Mitchell Handa and Senior Portfolio Manager Daniel Ong. Arif and Handa both held portfolio management positions with Pacific Investment Management Co. (PIMCO); Ong previously was a senior portfolio manager with Dimensional Fund Advisors (DFA).
The new fixed income funds join Avantis Investors’ five inaugural equity ETFs launched in September 2019, followed by five mutual funds that mirror the ETFs: Avantis International Small Cap Value ETF (AVDV), Avantis International Equity ETF (AVDE), Avantis Emerging Markets Equity ETF (AVEM), Avantis U.S. Equity ETF (AVUS) and Avantis U.S. Small Cap Value ETF (AVUV).
Vanguard Lowers Minimum Investment for Target Retirement Funds
Vanguard has broadened its access to Vanguard Institutional Target Retirement Funds (TRFs).
Effective immediately, the plan-level minimum investment requirement has been reduced to $5 million from $100 million.
“Whether it be through technology-driven innovations, leading advice solutions or world-class fund offerings, Vanguard works tirelessly to improve outcomes for plans sponsors and their participants,” says John James, managing director and head of Vanguard Institutional Investor Group. “When it comes to people’s hard-earned retirement savings, Vanguard is dedicated to continuing to lower the cost and complexity of investing to best steward the financial well-being of the millions of retirement plan participants we serve.”
Investments in Target Retirement Funds are subject to the risks of their underlying funds. The year in the fund name refers to the approximate year (the target date) when an investor in the fund would retire and leave the workforce. The fund will gradually shift its emphasis from more aggressive investments to more conservative ones based on its target date. An investment in a Target Retirement Fund is not guaranteed at any time, including on or after the target date, Vanguard says.
American Beacon Releases AHL TargetRisk Core Fund
American Beacon Advisors Inc. has launched the American Beacon AHL TargetRisk Core Fund. The fund’s shares became available on December 16.
The American Beacon AHL TargetRisk Core Fund is a long-only dynamic risk managed strategy, providing investors with a core, balanced portfolio allocation. The fund invests in global bonds and equities through futures contracts, and scales allocations to these asset classes based on market volatility. Risk management is central to the fund’s approach, with the aim of reducing overall drawdowns and exposure to swings in volatility while providing excess returns over the long term, regardless of market conditions.
TargetRisk Core builds on the American Beacon AHL TargetRisk Fund, which debuted at the end of 2018 and provides investors with a diverse allocation across bonds, equities, credit and inflation.
Gene Needles, chairman and CEO of American Beacon and its parent company, Resolute Investment Managers, says, “We’ve seen rapid market adoption of the American Beacon AHL TargetRisk Fund, so we’re delighted to once again partner with Man AHL to bring this new ‘sister’ fund to our clients. The fund is driven by some of the most sophisticated systematic trading systems available, and it employs deep investment and academic research with the aim of mitigating risk and adjusting its exposures to maintain a steady level of volatility in different market environments.”
Russell Korgaonkar, chief investment officer (CIO) at Man AHL, says, “We’ve had a strong strategic partnership with American Beacon for over six years, and we’re pleased to bring this new product to investors through the firm’s extensive distribution network. We believe that dynamic risk management will make the difference in generating returns over the long run, and that this systematic approach can provide investors with a smoother experience as they navigate choppy and unpredictable markets.”
Man AHL now sub-advises three funds for American Beacon. In addition to the new fund, Man AHL also sub-advises American Beacon AHL Managed Futures Strategy Fund (R5 Class: AHLIX; Investor Class: AHLPX; Y Class: AHLYX; A Class: AHLAX; C Class: AHLCX); and American Beacon AHL TargetRisk Fund (R5 Class: AHTIX; Investor Class: AHTPX; Y Class: AHTYX; A Class: AHTAX; C Class: AHACX).
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