Odds & Ends: American Beacon, HedgeCo, PIMCO, AQR and More

In this edition of Odds & Ends:

  • American Beacon Advisors Announces Plan to Launch ETMFs
  • HedgeCoVest Builds Roster of Leading Hedge Fund Managers
  • Several Leading Firms Partner with Envestnet Institute
  • PIMCO and Research Affiliates Partner on Global Equity Strategies
  • AMG Completes Investment in AQR Capital Management

American Beacon Advisors Announces Plan to Launch ETMFs

American Beacon Advisors has announced an initiative to launch actively managed exchange-traded products (ETPs) that are distinct from ETFs. These so-called “exchange-traded managed funds” (ETMFs) were approved by the Securities and Exchange Commission (SEC) for release by Eaton Vance, and American Beacon is the first third-party firm to license the products. Unlike ETFs, ETMFs are priced in relation to their net-asset value, which means intraday buyers don’t know the dollar-price they’ve agreed to pay until the end of the trading day.

American Beacon’s ETMFs will be marketed under the NextShares brand name. A January 15 press release bills NextShares as combining the benefits of actively managed mutual funds and low-cost ETFs: “Like active mutual funds, NextShares seek to outperform their benchmark index and peer funds based on their manager’s investment insights and research judgments. Like ETFs, NextShares will utilize an exchange-traded structure with built-in cost and tax advantages.”

HedgeCoVest Builds Roster of Leading Hedge Fund Managers

HedgeCoVest’s real-time hedge-fund replication platform continues to attract “some of the largest managers in the industry,” according to a January 20 press release. The platform has an account minimum of $30,000 but is open to non-accredited individual investors. Replicazor, the platform’s “revolutionary allocation tool,” emulates the portfolio and trading strategies of hedge funds directly in investors’ brokerage accounts.

Fred Alger Management, a $21 billion asset manager, is the latest leading firm to join HedgeCoVest’s platform. Other prominent members include Cornerstone Capital, the Boston Company, and Gems Advisors.

Several Leading Firms Partner with Envestnet Institute

BlackRock, Invesco, Neuberger Berman, Beaumont Capital, Innealta Capital, and American Funds have all partnered with Envestnet Institute, Envestnet’s education portal for registered financial professionals. According to a January 13 press release, the six “thought-leading firms” will provide original content and conduct online courses related to alternative investments, among other topics.

Envestnet is also highlighting its incorporation of the BeyondAlpha advisory community into its platform. BeyondAlpha is a “compliance-friendly” social-media environment for advisors to exchange ideas and analysis, as well as business tips with other advisors. Envestnet Institute will moderate BeyondAlpha discussions and create online discussion groups focused on “specific areas of interest and inquiry.”

PIMCO and Research Affiliates Partner on Global Equity Strategies

PIMCO and Research Affiliates are partnering on a global suite of equity strategies. The two firms have a longstanding relationship, according to a January 8 press release, and their new partnership in seven new additional equity strategies based on Research Affiliates’ pioneering RAFI Fundamental Index methodology.

RAFI selects and weights securities based on fundamental measures of company size, rather than market capitalization. The initial weights are then refined using additional measures designed to enhance risk-adjusted returns. This methodology will be applied to the seven equity strategies launched by PIMCO and Research Partners through their new partnership.

“The expansion of PIMCO’s and Research Affiliates relationship to these seven equities strategies increases the range of equity solutions we offer clients incorporating Research Affiliates’ innovative approach,” said PIMCO CEO Douglas Hodge.

AMG Completes Investment in AQR Capital Management

Back in mid-December, Affiliated Managers Group (ticker: AMG) said it had agreed to increase its stake in AQR Capital Management. Several weeks later, the firm announced it had completed its investment and expects that the additional investment will add an additional $0.60 per share to the economic earnings of AMG. As part of the deal, the firm’s three active founding partners and 18 other principles have signed long-term employment commitments with AQR, ensuring that AMG will continue to benefit from AQR’s key investment and management team. AMG will remain a minority shareholder.

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