JP. Morgan has partnered with Nationwide to launch a tax-deferred variable annuity that helps J.P. Morgan advisors minimize their clients’ taxes and maximize accumulation potential.
Clients can choose from a wide selection of underlying tax-deferred investment options associated with a choice of seven asset allocation models — U.S. conservative, balance or growth; global conservative, balance or growth; and global aggressive growth — without the limitation of contribution caps.
The annuity structure allows clients to buy or sell underlying fund options without triggering any taxable events. Principal and growth remain tax-deferred until withdrawals.
According to Nationwide’s 2021 Tax-Efficient Retirement Income survey, 60% of Americans expect their taxes to increase in the next four years and the firm’s annual Advisor Authority Study found that taxes are are consistent a top financial concern of affluent investors.
“This partnership draws on our decades-long track record of developing annuity solutions that can seamlessly integrate into the platforms that advisors and financial professional use to provide their clients with a more tax-efficient approach to holistic financial planning, said Craig Hawley, head of Nationwide’s annuity distribution, in a statement.
55ip Partners With Fidelity on Model Portfolios
Advisors using 55ip’s tax management platform can now access Fidelity Institutional’s professionally managed model portfolios. The collaboration makes it easy for advisors who transition to Fidelity model portfolios to process capital gains, leverage systematic ongoing tax-loss harvesting and use tax-smart withdrawals. Advisors can also save time through automated trading and rebalancing.
“Transitioning taxable assets to new portfolios, managing taxable accounts and leverage model implementation in general can be a heavy lift for advisors,” said Paul Gamboe, CEO of 55ip, which was acquired by J.P. Morgan Asset Management in December 2020. “Our relationship with Fidelity brings together our automated tax technology with Fidelity’s investments experience, diversified lineup and decades of portfolio management experience.”
The collaboration also includes new, deep integrations between 55ip and Fidelity, allowing advisors providing advisors single- sign on (SSO) from 55ip to Fidelity’s Wealthscape platform; automated account integration and enhanced processing for trade list execution.
Advisors who custody with Fidelity will have a more seamless experience whether they use Fidelity models or other model portfolios available through 55ip, which include those from J.P. Morgan, BlackRock, WisdomTree and RiverFront Investment Group, and models designed by advisors themselves.
Principal Financial Joins With Wilshire Advisors on Model Portfolios
Principal Financial Group has introduced 25 model portfolios as a result of a partnership with Wilshire Advisors.
The Principal Wilshire Diversified Portfolios consist of three series — global and U.S. hybrid and ETF-only, each with seven underlying portfolios that cater to different risk tolerances. In addition, there are three separately managed account models and one diversified income model. Twenty-four of the 25 portfolios are currently available on the Envestnet platform and the Principal Wilshire ETF Fixed Income portfolio, will be live in June.
The hybrid portfolios combine the active management capabilities of Principal Global Investors with the passive capabilities of BlackRock’s low-cost ETFs.
Alger Introduces the Alger 35 ETF
Alger has launched the Alger 35 ETF (ATFV), an actively managed semi-transparent large-cap ETF whose strategy is similar to the five-star Morningstar-rated fund, the Alger 35 mutual fund.
Both are high conviction, actively managed funds that invest in 35 “best ideas” sourced from Alger’s analyst team and both are managed by Dan Chung, CEO and CIO of Alger, who also manages several of the firm’s long-only and long/short growth equity strategies.
The new ETF has a 0.55% expense ratio after fee waivers that will last through April 30, 2023. A 12b-1 fee that can’t exceed 0.25% is waived for at least one year.
The number 35 has particular significance for Chung, who lost 35 of his colleagues in the September 11th attacks in 2001. Five percent of the net management fee of ATFV will be donated to charities and causes in their honor.
“We launched our first focused strategy in 2012 and have seen increased client demand and notable asset flows into the strategies since then,” said Chung in a statement.
The Alger 35 ETF is the firm’s second actively managed ETF. In early March the Alger 40 Mid Cap 40 ETF (FRTY), also a semi-transparent ETF but one with 40 “best ideas” in the mid-cap stock market. Both ETFs use the ActiveShares structure from Precidian Investments.
In separate but related news, shares of the Alger 25 mutual fund were transferred to the Alger 35 mutual fund effective May 7 in a tax-free reorganization that terminated Alger 25 fund and was approved by the Board of Trustees earlier in the year.
Harbor Capital Advisors Plans First ETFs
Harbor Capital Advisors is joining the growing number of mutual fund companies that are introducing ETFs for the first time.
The fund company expects to launch two new fixed income ETFs in September following completion of the registration process with the SEC. The funds are the Harbor Scientific Alpha High-Yield ETF and the Harbor Scientifica Alpha Income ETF, which includes both investment-grade and high-yield bonds.
The ETFs will be sub-advised by BlueCover Ltd., which joins fixed income industry investment and engineering professionals for the purpose of researching and developing scientific investment processes.
MassMutual Plans to Consolidate Funds
MassMutual plans to consolidate the mutual funds of its subsidiary Barings under the MassMutual Investments brand pending necessary approvals.
The move is expected to yield improved operational efficiencies that benefit investors and distribution partners and position MassMutual Funds for continued growth while enabling Barings to focus on client services and performance in its asset management business.
The change will add approximately $1.7 billion to MassMutual fund assets for a total $69 billion in assets distributed across 115 funds. Barings will act as subadvisor for the consolidated funds, adding to the $6.6 billion it currently subadvises for MassMutual funds.
If approved, the consolidation will result in two fund mergers, four new standalone funds and one fund closure during the fourth quarter of 2021 pending shareholder approval. Massmutual did not identify which funds will merge, close or launch.