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Fund News Advisors Can Use: Vanguard Opens Up Private Equity Access to Individuals

In this week's fund news, Vanguard is bringing private equity to individual investors, an ETF based on Barney Frank's LGBTQ Index goes to market, and Wells Fargo is to become the latest to allow wealthy clients to access cryptos.

In February 2020, Vanguard partnered with HarbourVest to bring private equity investments to pensions, endowments and foundations. And now the fund family will bring those strategies to qualified individual investors this summer.

“Private equity has the potential to improve long-term investment outcomes of a broadly diversified portfolio,” Vanguard CEO Tim Buckley said in a statement. “Over time we will expand access to this asset class, which has traditionally been reserved for the wealthiest investors, to the many qualified investors at Vanguard.” 

The firm will initially make the strategy available to eligible nonadvised Vanguard clients, and then eligible advised clients at Vanguard Personal Advisor Services in the near future. Clients must be a qualified purchaser and accredited investor.  

LGBTQ Loyalty, ProcureAM Launch First ETF Based on Barney Frank’s Index

ProcureAM has partnered with LGBTQ Loyalty Holdings to launch a new ETF based on the LGBTQ100 ESG Index, backed by former U.S. Rep. Barney Frank, who has fought for gay and lesbian equality for over three decades.

The LGBTQ + ESG100 ETF (LGBT), which started trading this week, invests in the top 100 corporations that most align with the LGBTQ community across the United States.

"Pressing corporations to implement diversity and ensure that their practices represent a commitment to LGBTQ equality is important," said Frank, an LGBTQ Loyalty board member, in a statement. "So is providing a positive incentive. Giving the LGBTQ community, and our friends and allies, a way to do this through their investments is the best example of this approach. I am proud to be a part of this effort, which brings together two of the major themes of my work in Congress: a financial system that serves both private and public needs, and human rights.”

This is the first ETF launched via the Procure Asset Launchpad, which helps third-party money managers bring ETFs to market.

Wells Fargo to Bring Cryptos to Qualified Investors

Wells Fargo said it plans to give qualified investors access to an actively managed cryptocurrency strategy, according to the Wells Fargo Investment Institute.

“We believe that cryptocurrencies have evolved into a viable investment asset,” the report said. “We believe long-term supply and demand trends support further industry growth, the potential for further compression in price volatility, and a possible role as portfolio diversifiers.”

The big brokerages have primarily steered clear of cryptocurrencies—with many not allowing advisors to recommend the products to clients. But that trend has been reversing. In March, Bloomberg reported that Morgan Stanley will offer wealthy clients access to three funds that enable ownership of Bitcoin. Goldman Sachs is also working on getting private wealth clients access to Bitcoin and other cryptocurrencies, and J.P. Morgan is also planning to offer an actively managed bitcoin fund to certain clients, CoinDesk reports.

Fidelity to Bring No-Fee Investing to Teens

This week, Fidelity launched a new offering that would allow 13- to 17-year-olds to open a brokerage account and trade domestic stocks, most ETFs and Fidelity mutual funds. The Fidelity Youth Account features zero subscription fees, zero account fees, zero minimum balances, zero domestic ATM fees and zero online commissions.

Unlike UGMA or UTMA accounts, which have been around for some time, the minor—not the parent or guardian—makes the investing decisions with this account, which is available to the teenage children of Fidelity’s retail clients. recently put out queries to both the XYPN network and FPA seeking feedback on the move. With few exceptions, advisors responded enthusiastically about the opportunity for financial education that the new accounts will afford. Some advisors were even jealous that their own custodians weren’t offering a similar type of account.

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