Displaying items by tag: funds

Stable value funds are a conservative investment option that aim to deliver higher returns than cash while preserving principal. They invest in high-quality bonds that are insured through contracts like guaranteed investment contracts or group annuities, which protect investors from losing money. 

These funds are available only in tax-advantaged retirement plans such as 401(k)s, and according to MetLife, more than 80% of defined contribution plans offer them. Stable value funds are often compared to money market funds, since both are designed for safety and stability. Over the 15 years ending March 2023, stable value funds delivered an annualized return of 2.99%, significantly higher than the 0.55% produced by money market funds. 

While money markets adjust quickly to interest rate changes, stable value funds respond more gradually, which can lead to short-term underperformance when rates are rising. Researching stable value funds involves looking at the fund’s goals, portfolio composition, fees, and historical performance.

Finsum: Advisors should also evaluate management tenure and ensure the fund’s returns align with its stated objectives for clients

Wellington Management, Vanguard, and Blackstone have jointly filed to launch the WVB All Markets Fund, a multi-asset interval fund designed to give retail investors broader access to private market investments. Structured as an interval fund, it allows limited quarterly redemptions and will blend public equities, fixed income, and private assets, with Wellington serving as the investment adviser. 

The strategy permits up to 60% allocation to public equities and 30% to fixed income—both primarily through Vanguard—while allowing up to 40% in private funds managed by Blackstone. Although management fees weren’t disclosed, the fund requires a $2,500 minimum initial investment across its share classes. 

This marks the trio's first product since announcing their partnership in April, as asset managers increasingly look to democratize private markets through vehicles like interval funds. 

Finsum: Interval funds can be opaque and illiquid, making education and transparency essential for successful adoption among retail investors and potential clients.

Interval funds are gaining traction as a compelling investment option, offering high yields and access to exclusive asset classes like private equity and credit. These funds operate as a hybrid between open- and closed-end funds, allowing investors to purchase shares anytime but limiting redemption opportunities to specific intervals, such as monthly or quarterly. 

While their appeal lies in diversifying portfolios and enhancing fixed-income returns, they come with notable downsides, including high fees that often exceed those of traditional mutual funds or index funds. 

Another concern is the limited track record of many funds, making it harder to evaluate long-term performance or compare strategies effectively. Additionally, the valuation of illiquid assets within these funds can mask underlying risks, as daily net asset values may not reflect real-time market conditions. 

Finsum: Investors, interval funds can be a strategic complement to a portfolio, but careful consideration of liquidity, fees, and transparency is essential.

Invesco announced the monthly dividend payments for two of its closed-end funds: Invesco High Income Trust II and Invesco Senior Income Trust. Both funds are maintaining their current monthly dividend rates, with no change from previous distributions. 

The dividend for Invesco High Income Trust II is set at $0.09641 per share, while Invesco Senior Income Trust will pay $0.04301 per share. Under their Managed Distribution Plans, these funds may distribute more than their income, including returning capital to shareholders, which could affect their long-term performance. 

Investors should keep in mind that these returns may not be directly linked to the funds' investment success and may be impacted by market fluctuations and tax regulations. 

Finsum: This might be a great option for investors looking to add income to their portfolio and may compensate for the lack of liquidity. 

BNP Paribas Asset Management has introduced a new ESG active fixed income ETF range, starting with the BNP Paribas Easy Sustainable EUR Corporate Bond and BNP Paribas Easy Sustainable EUR Government Bond ETFs. These ETFs aim to replicate benchmark performance while integrating sustainable principles using BNPP AM's ESG methodology and exclusion policies. 

The firm's Head of Index & ETF Strategies highlighted the agility of this approach in responding to controversies and adapting to changing environmental factors, aligning with sustainability label criteria. BNP made a commitment in January to improving its offerings around ESG offerings and this new suite of investments will fall in line with those goals.

 Lorraine Sereyjol-Garros, Global Head of Development for ETFs & Index Funds at BNPP AM, emphasized the importance of active ESG fixed income management in navigating the challenging market landscape, offering diversification and sustainable credentials in an affordable and convenient ETF structure.

Finsum: Active bond funds could be critical to navigating the landscape of 2024 as macro volatility is looming.