Fund Product, Company and Regulatory Updates as at 12 May 2020

Product Updates

T. Rowe Price launches new high-income fund

Asset manager T. Rowe Price has launched the T. Towe Price Global High Income Fund. The new fund is a concentrated, high-income portfolio of global high yield corporate bond opportunities. The fund is looking to apply an active management approach to global high yield to capitalise on market inefficiencies, sector positioning and idiosyncratic events while looking for enhanced return potential.

Ares and Fidante joint venture bears fruit

Global credit investment manager Ares Management Corporate in a joint venture with multi-boutique asset manager Fidante Partners - Ares Australia Management (AAM) - has produced its first Australian product: the Ares Global Credit Income Fund. The fund uses an active, dynamic strategy for investments in a highly diversified portfolio of credit issuers. This, the company says, is the first of several products launched in the Australian market over the coming two years.

BetaShares launches new ETF

The BetaShares Global Government Bond 20+ Year ETF - Currency Hedged (GGOV) has been launched by BetaShares, set to track an index offering exposure to a long-maturity, income-producing bond portfolio issued by governments of G7 nations. The exchange-traded fund (ETF) offers investors access to long-dated sovereign bonds issued by large, developed economies.

CFS shutters fund, investment options

Colonial First State (CFS) has closed a $19.5 million diversified global fund, the Acadian Diversified Alpha fund, due to recent market volatility, depreciation of the Australian dollar and a decline in the value of some underlying investments. Investment options in FirstChoice Wholesale Personal Super and FirstChoice Wholesale Pension were also closed in late April 2020.

NN2 Capital launches new hedge fund

With access by wholesale and institutional investors, NN2 Capital is launching a new hedge fund with almost no correlation to equities. The fund is designed to deliver both rising and falling equity market returns. The fund is to be launched in early June 2020 and has $1.8 million.

JANA expands service offering to advice firms

Asset consultant JANA has announced it is expanding its services into financial advice and private wealth companies in response to need from the sector. This is JANA’s first foray in 32 years into retail services, having exclusively worked with institutions. The new services on offer to advice firms will be managed account and consulting services to high-quality financial advice and private wealth practices.

Company Updates

QSuper and Sunsuper merger delayed

QSuper and Sunsuper are to delay their merger due to the difficulties of due diligence with staff working remotely.

Westpac reviewing business units

Westpac is establishing a new specialist businesses division led by Jason Yetton, the former chief executive of NewCo, a Commonwealth Bank-owned business. The group is to focus on its Australian and New Zealand banking businesses, particularly those that do not have sufficient scale or where returns are not worth the risk. The businesses under review include wealth platforms, superannuation and retirement products, investments, general and life insurance, and car finance.

Regulatory Updates

ISA and ME Bank in urgent hearing

Industry Super Australia and ME Bank are to appear before the House of Representatives Standing Committee on Economics for an urgent hearing to explain cutting of redraw balances on some home loans. Limited or no notice was offered to customers. ME Bank is owned by 26 superannuation funds.

The Committee also wants to talk over ISA’s early release calculations for superannuation. In documents, ISA claimed that an early withdrawal of $20,000 by a 30-year-old could result in losses of almost $100,000 in retirement, while ASIC’s MoneySmart website says that the loss looked more like $43,000. The superannuation sector says it has ample funds to meet early release requests, however, the Committee is to discuss ISA’s liquidity and illiquid assets.

ME Bank took out full-page newspaper ads issuing a “MEa culpa” (‘through my fault’) over the redraw balance controversy and committed to making all redraw balances what they used to be, so long as customers ask.