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Extraction Summary
1
People
9
Organizations
0
Locations
4
Events
5
Relationships
1
Quotes
Document Information
Type:
Financial conference document / research note
File Size:
Summary
This document is a Bank of America Merrill Lynch financial research note from the '2016 Future of Financials Conference' dated November 17, 2016. It analyzes the company 'EV' (likely Eaton Vance), detailing its Q4 assets under management ($336.4B), its recent acquisition of Calvert Investments, and its market position with NextShares ETMFs. The note also discusses the potential impacts of the DOL Fiduciary Rule and changes in corporate tax rates on the company's earnings. NOTE: The document provided is a financial analysis and is not related to Jeffrey Epstein.
People (1)
| Name | Role | Context |
|---|---|---|
| EV management | Management |
Mentioned in the context of their thoughts on the DOL Fiduciary Rule and the industry's direction.
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Organizations (9)
| Name | Type | Context |
|---|---|---|
| Bank of America Merrill Lynch |
Author/publisher of the research document, as indicated by the logo and source line.
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|
| EV |
The subject company of the analysis, likely Eaton Vance. The document discusses its AUM, acquisitions, products (Next...
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| Calvert Investments |
A company recently acquired by EV, noted as a leader in ESG (socially responsible) investing with ~$12B AUM.
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| Waddell and Reed |
A company that also launched NextShares products, competing with EV in the non-transparent active ETF market.
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| Folio |
A broker/distributor through which NextShares are available.
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| Interactive Brokers |
A broker/distributor through which NextShares are available.
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| UBS |
Mentioned as a future distributor for EV's NextShares, with a distribution deal signed for 2017.
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| Envestnet |
Mentioned as a future distributor for EV's NextShares, with a distribution deal signed for 2017.
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| DOL (Department of Labor) |
Mentioned in relation to its Fiduciary Rule and its potential impact on the financial industry.
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Timeline (4 events)
17 November 2016
2016 Future of Financials Conference, where this document was likely presented.
October (prior to Nov 2016)
Waddell and Reed launched 3 of their own NextShares products.
Recent (prior to Nov 2016)
EV's acquisition of Calvert Investments.
EV
Calvert Investments
Relationships (5)
EV
→
Acquirer/Acquired
→
Calvert Investments
EV also commented on their recent acquisition of Calvert Investments.
Both companies have launched NextShares products, making up the total of 6 in the market.
EV signing on UBS and Envestnet for distribution in 2017.
EV signing on UBS and Envestnet for distribution in 2017.
The document is a research note by Bank of America Merrill Lynch analyzing the company EV.
Key Quotes (1)
"management thinks that whatever happens to the DOL Fiduciary Rule (delay, modify, etc.), the industry has already been shifting in a fiduciary direction, and they expect that to continue"Source
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Quote #1
Full Extracted Text
Complete text extracted from the document (2,560 characters)
important (23%) while investors thought more operating leverage was least important for EV (8%).
Chart 57: What would get you more interested in investing in EV stock?
40%
38%
35%
31%
30%
25%
23%
20%
15%
10%
8%
5%
0%
Stronger high-fee flows and a favorable fee rate
ETMFs taking off
Increased capital return
Positive operating leverage aiding the margin
40%
38%
35%
31%
30%
25%
23%
20%
15%
10%
8%
5%
0%
Stronger high-fee flows and a favorable fee rate
ETMFs taking off
Increased capital return
Positive operating leverage aiding the margin
Source: BofA Merrill Lynch Global Research
•
EV disclosed their F4Q AUM which was $336.4B up modestly from $334.4B at the end of its prior quarter as modest market losses were offset by inflows which were also disclosed by EV. Flows for C3Q (F4Q) were $4.8B/6% aog or $1.7B/3% aog ex exposure management flows, roughly in-line with expectations in a fairly challenging backdrop. EV also commented on their recent acquisition of Calvert Investments (~$12B AUM, see note) and is excited about the opportunity in ESG investing. Calvert is a leader in investing in socially responsible companies, a small but rapidly growing area.
EV disclosed their F4Q AUM which was $336.4B up modestly from $334.4B at the end of its prior quarter as modest market losses were offset by inflows which were also disclosed by EV. Flows for C3Q (F4Q) were $4.8B/6% aog or $1.7B/3% aog ex exposure management flows, roughly in-line with expectations in a fairly challenging backdrop. EV also commented on their recent acquisition of Calvert Investments (~$12B AUM, see note) and is excited about the opportunity in ESG investing. Calvert is a leader in investing in socially responsible companies, a small but rapidly growing area.
•
When asked about the outlook on fixed income performance and flows given the recent run up in rates as well as the outlook, EV was fairly positive in their outlook given their positioning and leadership in floating rate which should perform well and attract flows in a rising rate environment.
When asked about the outlook on fixed income performance and flows given the recent run up in rates as well as the outlook, EV was fairly positive in their outlook given their positioning and leadership in floating rate which should perform well and attract flows in a rising rate environment.
•
ETMFs continue to be topical for EV given they are the only player in the non-transparent active ETF business with their NextShares franchise. EV has launched 3 NextShares thus far and Waddell and Reed launched 3 of their own in October, making 6 total NextShares in the market right now, however they are only available through Folio and Interactive Brokers. While we continue to view this as not very significant in the near term and a potential longer term opportunity, with EV signing on UBS and Envestnet for distribution in 2017, we should see a little more traction ahead.
ETMFs continue to be topical for EV given they are the only player in the non-transparent active ETF business with their NextShares franchise. EV has launched 3 NextShares thus far and Waddell and Reed launched 3 of their own in October, making 6 total NextShares in the market right now, however they are only available through Folio and Interactive Brokers. While we continue to view this as not very significant in the near term and a potential longer term opportunity, with EV signing on UBS and Envestnet for distribution in 2017, we should see a little more traction ahead.
•
Regarding potential changes from the election, while very early, management thinks that whatever happens to the DOL Fiduciary Rule (delay, modify, etc.), the industry has already been shifting in a fiduciary direction, and they expect that to continue, though the pace could vary depending on the eventual outcome. Additionally, EV has limited exposure to higher distribution share classes (<20% of sales), so they see a more limited impact. In terms of a lower corporate tax rate (15-20%), this would have a meaningful benefit for EV, potentially increasing earnings by 15-20%.
Regarding potential changes from the election, while very early, management thinks that whatever happens to the DOL Fiduciary Rule (delay, modify, etc.), the industry has already been shifting in a fiduciary direction, and they expect that to continue, though the pace could vary depending on the eventual outcome. Additionally, EV has limited exposure to higher distribution share classes (<20% of sales), so they see a more limited impact. In terms of a lower corporate tax rate (15-20%), this would have a meaningful benefit for EV, potentially increasing earnings by 15-20%.
38
2016 Future of Financials Conference | 17 November 2016
2016 Future of Financials Conference | 17 November 2016
Bank of America
Merrill Lynch
Merrill Lynch
HOUSE_OVERSIGHT_014352
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