Nine Vanguard ETFs expected to have Capital Gains Distributions for 2014

Vanguard recently announced ETFs in their lineup that will be distributing capital gains to unit holders for 2014. These include: Extended Duration Treasury ETF (EDV) Intermediate-Term Bond ETF (BIV) Intermediate-Term Corporate Bond ETF (VCIT) Long-Term Bond ETF (BLV) Mortgage-Backed Securities ETF (VMBS) Short-Term Bond ETF (BSV) Short-Term Corporate Bond ETF (VCSH) Short-Term Government Bond ETF (VGSH) Total Bond Market ETF (BND) Details on the exact distributions, as well as...

iShares ETFs with 2014 Capital Gains Distributions

While ETFs are mostly tax efficient, especially compared to most mutual funds, there are some ETFs that do incur capital gains distributions annually.  iShares recently announced the ETFs that will be subject to a distribution for 2014. iShares Core U.S. Aggregate Bond ETF (AGG) iShares Global ex USD High Yield Corporate Bond ETF (HYXU) iShares iBonds Mar 2016 Corporate ex-Financials ETF (IBCB) iShares Liquidity Income ETF (ICSH) iShares Morningstar Multi-Asset Income ETF (IYLD) iShares...

Investors in this iShares Frontier ETF face unusually high capital gains obligation

One of the reasons ETFs have been adopted so widely is that ETFs are typically very tax-efficient investments, especially when compared to mutual funds, because their structure typically allows them to avoid shareholder distributions.  The operative word in the opening sentence is typically.  This year, one particular ETF, the iShares MSCI Frontier Markets 100 ETF (Symbol: FM, NYSE-Arca, recent price $34.26) will pay out a large distribution on December 24th.  The...

John Hancock latest to support use of Liquid Alternatives in 401(k) Plans

Hardly a week goes by without a retirement services firm issuing a report on why retirement plans should adopt liquid alternatives for use in 401(k) plans.  We’ve covered many in this blog over the past several months.  With a report by Leo Zerilli, CIMA, head of investments, John Hancock becomes the latest to suggest that DC plans should incorporate liquid alternative investments into professionally-managed asset allocation options. Interestingly enough,...

Performance Disparities between DB and DC Plans due to Real Assets, Emerging Market Equity, and Alternatives Exposures

BNY Mellon’s Investment Strategy and Solutions Group conducted research resulting in a report that provides detailed analysis on the performance disparities between Defined Benefit and Defined Contribution Plans.   A few excerpts: Broadening the DC universe to include the kinds of allocations to include the kinds of allocations that institutional-quality pension plans have used for years, we believe, provides the potential for DC plans to improve their risk-adjusted return while...

Is “30/30/40” the new “60/40”?

In an article titled, “In Alts We Trust” a recent issue of Investment News discusses how managers that are advocating 60/40 portfolios be replaced by a 30/30/40 portfolio.  The premise?  That high equity valuations and that low bond yields cannot provide the returns or downside protection that they afforded previously.  The proliferation of liquid alts funds, which can offer good alternatives managers with reasonable fees, offer investors opportunities previously unavailable....

Press Release: Endowment Index^TM Historical Data Now Available Through Morningstar, Interactive Data and Bloomberg

APPLETON, Wis., Nov. 11, 2014 /PRNewswire/ Historical index data for the Endowment IndexTM — calculated by Nasdaq OMX® — is now available through major index and investment databases, including Bloomberg, Morningstar, and Interactive Data.  In addition, the 30,000+ advisors on the Envestnet platform can now select the Endowment IndexTM to benchmark client portfolios. Endowment IndexTM data can be accessed through most major quote providers and websites under the symbol...

World’s Largest Pension Fund Adds Alternatives To Their Portfolio For First Time

The second largest retirement pool of retirement savings in the world¹, the Government Pension Investment Fund, Japan (“GPIF”) recently announced a new policy asset mix for the medium-term plan.  The policy change is based upon certain economic assumptions, including expectations that interest rates will rise in the next decade.  In addition, the review period was accelerated due to expectations that Japan is positioned to “significantly transform itself from economy of persistent inflation”....

University Endowment Portfolio Managers Increase Alternatives Allocation

A preliminary report from NACUBO (National Association of College and University Business Officers) shows that university endowment porfolio managers increased their allocation to alternative investments in 2014.  The preliminary study included data from over 400 institutions showed that allocation to alternative investments rose to 58% in the past year, a five point increase from the previous year.  Alternative asset categories include marketable alternatives, private equity, venture capital, natural resources, distressed...

Investment News: “Alternatives: Key Piece of the Puzzle”

The case for traditional long-only allocations to stocks and bonds is getting weaker by the day, and that’s putting the financial advice industry, if somewhat reluctantly, on the junction of major change And so starts an extensive front-page article in a recent issue of Investment News.  The article goes on to provide a basic background of the growth of liquid alts with commentary from a number of advisors and asset...