US investment advisor Hennion & Walsh Asset Management has launched three funds of exchange traded funds, the SmartGrowth Lipper Funds, designed to help investors choose the right mix
US investment advisor Hennion & Walsh Asset Management has launched three funds of exchange traded funds, the SmartGrowth Lipper Funds, designed to help investors choose the right mix of ETFs from an ever-growing universe and avoid pitfalls such as selecting inferior, unproven or inappropriate ETFs and increasing risk through sector or security overlap.
Each fund possesses its own unique risk/reward profile from conservative to moderate to growth, and tracks an index of ETFs independently created by Lipper, the Reuters mutual fund research subsidiary. The funds are available for purchase directly by investors or through financial advisors, with an initial investment of USD1,000.
The trio of funds comprises the SmartGrowth ETF Lipper Optimal Conservative Index Fund, SmartGrowth ETF Lipper Optimal Moderate Index Fund and SmartGrowth ETF Lipper Optimal Growth Index Fund. Each fund closely tracks one of Lipper’s proprietary Optimal Target Risk Indices, which are composed of liquid ETFs selected from the available universe traded on US stock exchanges.
Individual ETFs are chosen from all broad-based, sector and industry-specific US equity, international equity, fixed income and commodity asset classes. Lipper determines the optimal ETF allocations for each index with the goal of maximising return and mitigating risk. The indexes are rebalanced by Lipper as necessary on a quarterly basis.
Hennion & Walsh Asset Management is the investment advisor to all three funds. The firm has an exclusive licensing arrangement under which Lipper independently oversees each of the underlying indices while Hennion & Walsh provides day-to-day management of the funds.
‘The exchange-traded fund marketplace has become overcrowded to a point of saturation, causing investors and advisors much confusion as to which to choose and how to best incorporate them into portfolios,’ says Kevin D. Mahn, Hennion & Walsh chief investment officer and portfolio manager for the three funds of ETFs.
‘Lipper’s disciplined process for identifying best of breed ETFs allows us to optimise the potential risk and return for each fund. Better still, each of these revolutionary, low cost asset allocation tools is packaged by us in the familiar, easy to understand and use mutual fund structure, helping investors better to navigate the burgeoning ETF landscape.’
The SmartGrowth Lipper Funds are designed for use by investors and advisors as core portfolio investments that may be supplemented with satellite investments, or as satellite investments that complement or enhance core security holdings. The funds are also intended for use in retirement plans, including Individual Retirement Accounts.
‘Target date mutual funds can give investors a false sense of security, as they allocate assets according to a set-in-stone, predetermined formula that assumes that all investors retiring within the same time span have equal resources, goals and needs,’ said Bill Walsh, president of Hennion & Walsh. ‘By design, our new SmartGrowth Lipper Funds focus on target risk and aren’t constrained by artificial asset allocation limitations.’
Adds Rich Hennion, executive vice president of Hennion & Walsh: ‘Lipper’s quantitative, objective ETF selection and index construction process will redefine the rules for optimising the building of diversified investment portfolios.’
Based in Parsippany, New Jersey, Hennion & Walsh Asset Management is an affiliate of full-service broker/dealer Hennion & Walsh. Founded in 1990, the firm is a full-service securities firm specialising in municipal bonds, offering 13 proprietary unit investment trusts under the SmartTrust brand, as well as managed money portfolios to both individuals and retirement plans. At the end of last year the advisor had USD170m in assets under management.
