BlackRock’s head of global stewardship leaves position.
Date: Oct. 30, 2017 Alert: MODERATE**
Briefing Points – i) Zack Oleksik, who lead and help form BlackRock’s Investor’s Global Stewardship group has left the post; ii) Under Mr. Oleksiuk, the group established BlackRock’s corporate governance guidelines and practices for corporate and individual investors; iii) No replacement for Mr. Oleksiuk has been named.
Affected Funds – BlackRock Impact Funds
Asset Class – IS Equity & US Fixed Income
Structure – Open-end Mutual Funds
Management Company – BlackRock Advisors, LLC (New York, NY)
Alert Level – MODERATE
Type of Concern – Corporate Management Team Change
Recommended Actions – Inquire about team coverage and new hire status.
Date – Oct. 23, 2017
Event – PIMCo appoints new head of ESG portfolio management.
Briefing Points – i) Alex Struc, the head of ESG portfolio management at PIMCo is scheduled to leave the firm at the end of October; ii) Mr. Struc will be replaced by Mike Amey, who also replaced him earlier as pm of 2 ESG bond funds; iii) Mr. Struc was replaced as part of broader firm management changes – he was pm of the PIMCo Total Return ESG and the PIMCo Low Duration ESG funds.
Affected Funds –
i) PIMCo Total Return ESG Fund
ii) PIMCo Low Duration ESG Fund
Asset Classes – US Fixed-income
Structure – US Open-end mutual funds
Management Company – PIMCo
Alert Level – HIGH
Type of Concern – Portfolio management team change
Recommended Actions – Many changes at all levels of management are occurring at PIMCo. While their fixed-income capabilities remain, it’s questionable and more than a little discomforting as to whether these changes don’t reflect more serious displacements. Investors would be well-served to heighten their face-to-face oversight and focus on indications of underlying discontent at the firm.
Date – Oct. 19, 2017
Event – Tortoise is acquired by private equity firm Lovell Minnick.
Briefing Points – i) Private equity firm Lovell Minnick has agreed to buyout Tortoise, the manager of the Tortoise Water Fund ETF; ii) The acquisition deal includes joint ownership with Tortoise employees and other institutional investors.; iii) The fund’s portfolio management team will remain intact and there will be no changes to its investment process.
Affected Funds – Tortoise Water Fund ETF (TBLU)
Asset Class – International Equity
Structure – US Passively-managed ETF
Management Company – Tortoise Index Solutions, LLC (Leawood, KS)
Alert Level – LOW
Type of Concern – Merger/Acquisition/Divestiture
Recommended Actions –
Date – Oct. 12, 2017
Event – Standard Life introduces off-shore ESG impact fund.
Briefing Points – i) Standard Life newly introduced fund employs a selection overlay to screen for companies with “positive” ESG impacts; ii) Portfolio selections comply with SDG standards; iii) The fund is expected to initially hold 35-60 names.
Affected Funds – Standard Life Global Equity Impact Fund
Asset Class – International Equity
Structure – Off-Shore Fund (Luxemburg domicile)
Management Company – Standard Life Investments (Boston, MA)
Alert Level – LOW
Type of Concern – New Untested Mandate
Recommended Actions – Evaluate portfolio management process and risk-return behavior over mid-term market cycle.
Date – Oct. 11, 2017
Event – New hire at BlackRock to boast their investor ESG communication and educational efforts.
Briefing Points – i) Brain Deese who was a senior Obama advisor on climate, has been hired by BlackRock to head its ESG division; ii) Mr. Deese’s principle role will be to enhance investor communication and education on ESG matters.
Affected Funds – BlackRock Impact Funds
Asset Class – US Equity & US Fixed Income
Structure – US Open-end Mutual Funds
Management Company – BlackRock Advisors, LLC (New York, NY)
Alert Level – LOW
Type of Concern – Investor Outreach/Education
Recommended Actions – None at this time.
Date – Oct. 10, 2017
Event – New ETF from new manager – Change Finance.
Briefing Points – i) Change Finance, a new majority women run firm, has introduced its first ETF; ii) The fund screens-out companies that are fossil fuel extractors and polluters; iii) The fund is (equally-weighted) and pegged against the Selective US Large Cap Index.
Affected Funds – Change Financial Diversified Impact US Large-Cap Fossel Fuel Free ETF (CHGX)
Asset Class – US Large-Cap Equities
Structure – US Passively-managed ETF
Management Company – Change Financial PBC (Washinton, DC)
Alert Level – HIGH
Type of Concern – New untested mandate/team
Recommended Actions – Everything about this operation and its entry into the asset management business is new, and consequently requires patient oversight until an adequate mid-to-long term track record has been established.
Date – Oct. 9, 2017
Event – Deutsche introduces 3 new ESG ETFs.
Briefing Points – i) Deutsche has opened 3 sustainable ETFs; ii) The new ETFs are passively-managed international equity portfolios that are linked to MSCI indices,
Affected Funds – i) Xtrackers MSCI USA ESG Leaders Equity ETF
- ii) Xtrackers MSCI EAFE ESG Leaders Equity ETF
iii) Xtrackers MSCI World ESG Leaders Equity ETF
Asset Classes – Domestic and International Equity
Structure – US Passively-managed ETF
Management Company – Deutsche Asset Management (NY, NY)
Alert Level – LOW
Type of Concern – Change in product-line
Recommended Actions – Conduct new product due diligence with emphasis on expected asset growth and cash flow characteristics over mid-term.
Date – Oct. 2, 2017
Event – NuVeen opens new fixed-income ESG ETF portfolio.
Briefing Points – i) The new offering expands NuVeen’s ETF list to 8 products; ii) The fund’s benchmark is the Bloomberg Barclay’s US Aggregate Bond Index; iii) The fund is one of only a handful of its type now available in the marketplace.
Affected Funds – NuShare’s ESG US Aggregate Bond ETF (NUBD)
Asset Classes – US Fixed-Income
Structure – Passively-managed ETF
Management Company – NuVeen Asset Management, LLC (Minn, MN)
Alert Level – LOW
Type of Concern – Change in Product-line
Recommended Actions – Conduct due diligence of new mandate after mid-term track record is experienced.
