1) ETFs Still Gathering Assets, but Inflows Slow as Investors Favor Lower-cost Funds CNBC | 8/2/2018
Because… ETFs garnered $156.9 billion this year through July, down 42.6% from a net $273.1 billion in the first seven months of 2017. Almost all asset classes experienced a sales decline. U.S. Equity raised $52.2 billion, falling 25.8% from the previous year. International Equity collected $24.0 billion, representing a 75.4% drop. Taxable Bond surpassed U.S. Equity in June to become the best-selling asset class, but its intake of $53.4 billion decreased 32.5% from the prior year. Municipal Bond was the only major asset class that showed YTD sales growth, with its inflows of $3.0 billion up 21.4% from a year ago. However, the substantial slowdown from a record 2017 should not be interpreted as a sign of ETFs losing steam since it’s also affecting mutual funds.
2) Vanguard Continues to Expand Active Fixed Income Offerings with Proposed Global Credit Bond Fund Vanguard | 8/9/2018
Because… The new fund will fill another gap in Vanguard’s product line. Vanguard currently offers one World Bond fund: Total International Bond Index Fund. The fund, which is the industry’s only index-based World Bond mutual fund, accumulated $110 billion as of July since its inception in May 2013. Industrywide, actively managed World Bond mutual funds, with total assets of $142.6 billion, gathered $7.5 billion in the first half of 2018, compared with their inflows of $2.7 billion throughout 2017. There were three active funds with more than $10 billion of assets in this asset category and another 18 with over $1 billion of assets as of June, but none of these 21 funds focus exclusively on the U.S. and international credit markets.
3) Allianz Life Announces Partnership with Envestnet Business Wire | 8/13/2018
Because… This is the second partnership Allianz Life has established with an advisory platform provider. The insurer partnered with Orion Advisor Services nearly a month ago, which provides RIAs with access to all Allianz Life fixed index annuities and index variable annuities. The deal with Envestnet is another win-win solution for both. Allianz can put its insurance products in front of 88,000 advisors who use Envestnet technology and services. Envestnet, by incorporating annuities into wealth management, enables advisors to offer more comprehensive guidance. In 1Q18, variable annuity sales declined for 17 consecutive quarters, while fixed annuity sales remained flat, according to LIMRA. However, LIMRA expects an overall 5%-10% increase in annuity sales growth in 2018 from a year ago.