1) 529 Plans A Well-Kept Secret, Survey Says Financial Advisor | 5/24/2019
Because… The most recent Morningstar research discovered that fees have continued to decline for both direct- and advisor-sold plans. The average advisor-sold portfolio costs 0.93%, down by 0.06% from 2017, while the average cost of direct-sold portfolios was lowered to 0.39% from 0.42% in 2017. However, assets in 529 plans only reached $309.7 billion at the end of March, representing a 3.6% increase from a year ago. The lack of investor participation is a major reason for slow asset growth. The survey by Nebraska’s NEST 529 College Savings Plan found that 77% of respondents have never contributed to a 529 plan. With 57% of Americans either unfamiliar with or do not know what a 529 college savings plan is, 529 plans are one of the least-used options for financing a child’s higher education. It is vital for program managers and distributors to work together to enhance investor awareness.
2) New ETFs Join $1B Club Quickly ETF.com | 5/28/2019
Because… While the asset-gathering success of Xtrackers MSCI USA ESG Leaders Equity ETF (USSG) and iShares ESG MSCI USA Leaders ETF (SUSL) may entice other ETF providers to try their luck, ETF managers should not expect a rising tide to lift all boats. As pointed out by ETF.com, the funds have yet to attract organic flows because the vast majority of money that has entered USSG and SUSL did so in large block trades. Financial backing from an institutional investor, Ilmarinen, Finland's largest mutual pension insurer, is apparently behind the smash hit. Based on FUSE Research’s analysis, ESG ETFs only had $13 billion as of March, whereas ESG mutual funds held $603 billion, accounting for 95% of total ESG retail assets. However, ESG mutual funds parted with $8.3 billion during the 12-month period ending March 2019.
3) Brandes to Dissolve the Value NextShares SEC Filings | 5/29/2019
Because… Hartford just filed to liquidate its only NextShares offering at the beginning of May. The termination of Brandes Value NextShares means another exchange-traded managed fund (ETMF) provider is bailing out. The number of ETMF sponsor has been reduced to three, including Eaton Vance, the parent company of NextShares Solutions; Calvert, an Eaton Vance affiliate; and Ivy Investments. Eaton Vance Stock NextShares, the first ETMF launched in February 2016, collected $6.1M as of 5/30/19. Brandes announced in February the availability of its Value NextShares Fund at UBS, but its assets of $4.9 million suggests that getting on a wirehouse platform has not helped gather assets. Investors’ lack of familiarity with this new structure and inability to see its advantages over existing investment vehicles may have led to the tepid reception.