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Fund News Advisors Can Use: Vanguard, BlackRock Bet Big on Personalization

In this week’s fund news, Vanguard and BlackRock take stakes in Just Invest and SpiderRock, respectively; Goldman rolls out its first transparent active equity ETF; and Jacob Asset Management gets into the ETF business.

Fund giants Vanguard and BlackRock made waves this week, with both companies taking stakes in wealthtech companies that will help advisors bring more personalization to their client portfolios.

Vanguard announced plans to purchase Just Invest, a wealth management technology company with a direct indexing offering, the fund company’s first-ever corporate acquisition.

Just Invest was founded in 2016 and now has over $1 billion in assets under management. The acquisition will help Vanguard build out its direct indexing offering; the firm has already been running a pilot program to its RIA clients over the past year and half, powered by Just Invest. It will add to the firm’s $3 trillion financial intermediary business, serving RIAs and bank and broker/dealer advisors.

The move follows a tidal wave of deals in the direct indexing space, including Morgan Stanley’s acquisition of Eaton Vance and its Parametric direct indexing business; BlackRock's deal to acquire Aperio, which provides customized index equity SMAs; and most recently JPMorgan Chase & Co.'s move to buy OpenInvest, a financial-technology firm that offers a custom indexing solution.

Also, this week, BlackRock announced it has taken a minority stake in SpiderRock Advisors, which provides option overlay strategies to advisors and institutions and manages $2.5 billion in assets. The investment adds to BlackRock’s personalization and tax management capabilities for separately managed accounts and builds on its acquisition of Aperio.

“I am amazed as firms sit back and watch the BlackRocks and JPMorgans and Morgan Stanleys and Goldman Sachses and Charles Schwabs of the world limit their future growth opportunities by locking down the customized solution part of the business,” said Neil Bathon, founder and partner at FUSE Research.

Goldman Sachs Rolls Out Its First Transparent, Active Equity ETF

Goldman Sachs Asset Management has launched its first transparent, active equity ETF, the Goldman Sachs Future Planet Equity ETF (GSFP).

The fund will invest in companies that seek to solve environmental problems around the themes of clean energy, resource efficiency, sustainable consumption, the circular economy and water sustainability.

“We believe we’re at a key inflection point: For the first time ever, governments, corporates and consumers are all aligned in driving a global sustainability revolution, but the scale of the challenge is so large that a holistic approach is necessary,” said Alexis Deladerrière, portfolio manager of GSFP and head of international developed equity markets for Goldman Sachs Asset Management’s Fundamental Equity team, in a statement. “GSFP will seek to invest in companies providing solutions to a variety of environmental challenges that are critical to supporting our planet for future generations.”

The fund has a net expense ratio of 75 basis points.

Jacob Asset Management Gets Into the ETF Business

Jacob Asset Management, a Los Angeles–based boutique active investment management firm in business since the late 1990s, said this week that its first ETF, the actively managed Jacob Forward ETF (JFWD), began trading on the New York Stock Exchange.

The fund invests in forward-thinking companies that Jacob believes are using technologies to create competitive advantages and superior growth. The fund will focus primarily on the technology and health care sectors.

"We thrive on discovering exciting, enduring businesses with the potential to introduce innovative solutions to the global economy, while delivering solid growth for our investors," said Ryan Jacob, founder and CEO, Jacob Asset Management, in a statement. "This ETF joins our three mutual funds and takes advantage of our more than 20 years of experience analyzing companies in rapidly evolving industries.”

Bloomberg reports that Jacob, now 51 years old, is following in the footsteps of Cathie Wood and Ark Investment Management, whose thematic funds have been wildly successful.

Jud Mackrill Launches Venture Capital Fund

Jud Mackrill, former chief marketing officer at Carson Group and CEO of Milemarker, has launched a new venture capital fund aimed at the registered investment advisor market. Mackrill, along with his wife, Kim, Dr. Jay Yadav, former advisor Tommy Martin and Dr. Matthew McGirt, have co-founded Mammoth Scientific, which will invest in health science and technology companies.

While venture capital investments have traditionally been reserved for institutional investors, primarily for regulatory reasons, Mammoth has created a proprietary fintech platform that incorporates 2021 Securities and Exchange Commission and health care investment rules. That allows RIAs to market and use such investments in a compliant way.

“RIAs have been completely underserved as it relates to access to high quality venture capital and we knew that was a problem we could solve,” said Mackrill, who serves as chief experience officer.

The Mammoth Health and Tech Fund has been seeded with $100 million, and invests in series A and beyond life science and tech companies with complex regulatory needs.

“We specifically seek to add value to portfolio companies that fill an unserved gap or unmet need in health care and life sciences, not merely a preference-based product or service,” the firm states.

Fidelity Adds Four New Model Portfolios

Fidelity Institutional, the firm’s RIA custody unit, expanded its model portfolios lineup this week, adding four new target allocation mixes to its Fidelity Target Allocation, Fidelity Target Allocation Blended and Fidelity Target Allocation Index-Focused Model Portfolio offerings, including equity-to-bond mixes of 10/90, 30/70, 50/50 and 100/0.

Fidelity launched its Target Allocation model portfolios three years ago, and those portfolios have outperformed an average of 88% of peers, as of May 31. The Fidelity Target Allocation 60/40 (I) is the most popular portfolio in its lineup, and that model outperformed 95% of peers.  

Fidelity’s models can also be customized by vehicle type, managers and custom risk profiles, among others.

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