1) Ivy Plans to Delist Three ETMFs Ivy Investments | 8/15/2019
Because… Ivy was the first third-party fund firm to offer NextShares products and is also the last third-party provider to exit the exchange-traded managed fund (ETMF) space. As of August 14, 2019, its Focused Energy NextShares, Focused Growth NextShares, and Focused Value NextShares had assets of $4.8 million, $13.9 million, and $8.2 million, respectively. Their delisting indicates that first movers do not always have an advantage. After the liquidation of these three funds, Eaton Vance, the parent company of NextShares Solutions, will be the only ETMF sponsor. Eaton Vance itself already dissolved Floating-Rate NextShares at the beginning of August and will terminate Oaktree Diversified Credit NextShares at the end of the month, which will leave just three ETMFs on the market. It is safe to say that the NextShares adventure has come to an end.
2) Investors Pile into Money Market and Bond Funds, Leave Active Equity in Droves Financial Advisor | 8/15/2019
Because… The article quoted data from Morningstar, which highlighted that “money market funds had their strongest three-month stretch in at least 10 years.” Money market funds collected $222.1 billion this year through July, compared with net outflows of $12.8 billion during the first seven months of 2018. Fidelity, the largest money market fund provider in the U.S., reportedly increased its money market fund assets by 20% over the past 12 months. Earlier this week Legg Mason filed for three institutional money market funds. At the beginning of July, SSGA launched its first ESG money market fund. Investors, in a panic about the economic slowdown and stock market volatility, are parking their money in conservative money market funds. This sentiment may impel more asset managers to refocus on strengthening their money market fund offerings.
3) SoFi Introduces 529 Contributions to SoFi at Work Program PR Newswire | 8/15/2019
Because… For a firm with origins in providing student loan refinancing, adding 529 contributions is a natural business extension because many of its clients have recognized the importance of college savings from their own experiences. SoFi is not the first robo-advisor that offer 529 capabilities. FutureAdvisor moved into this market four years ago. Wealthfront partners with Ascensus and the State of Nevada on a nationwide 529 plan. As digital advice providers seek to diversify their services, they have become a new distribution channel for 529 plans. These robo-advisors typically use computer algorithms to project the cost of a selected college, calculate financial aid, and show how much should be saved based on input from investors to an online questionnaire. The convenience of account setup, personalized advice, low cost, and a variety of portfolio choices make automated online platforms an attractive option for 529 investors.