Monday, 30 March 2020

Review of Voya Investment Management

Review of Voya Investment Management
21 Mar
5:57

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Voya Investment Management is a New York-based registered investment advisor that manages investments for institutions and individual clients. With 206 investment advisors, Voya Investment Management covers a wide range of investment strategies, including equity, fixed income, real estate and hard currency.

All information included in this review is accurate as of March 18, 2020. For more information, please consult the Voya Investment Management website.

Assets under management: $108,248,624,160
Minimum investment: $1,000, no minimum on some investment types
Fee structure: Assets under management
Headquarters location: 230 Park Ave New York, NY 10169
https://investments.voya.com/
212-309-8200

Overview of Voya Investment Management

Voya Investment Management got its start in 1972 when it was known as Aetna Capital Management. For many years the firm was a subsidiary of Amsterdam-based ING Holdings. But when ING began divesting its U.S. retirement, investment and insurance business in 2013, the firm rebranded to Voya, an abstract name meant to evoke the image of a “voyage.”

Today, Voya Investment Management Co. LLC is a registered investment advisor and is a wholly-owned subsidiary of Voya Holdings, which is in turn a wholly-owned subsidiary of Voya Financial Inc. (VOYA), a publicly traded company.

What types of clients does Voya Investment Management serve?

Voya Investment Management largely caters to institutional clients in its role as an advisor and sub-advisor. The firm manages the investments of other investment companies. In addition, Voya provides investment management directly to state and municipal governments, insurance companies, corporations, pensions, charitable organizations and banks and thrift institutions. Only about 2% of the amount of assets Voya manages is on behalf of individual investors.

Voya primarily charges a percentage of assets under management, though the firm also charges performance-based fees in some instances.

For institutional clients, Voya’s minimum ranges from $25 million to $100 million. Investors in R share classes, available through qualified retirement accounts, have no investment minimum. When it comes to mutual funds for individual investors, Voya typically has a $1,000 minimum.

Services offered by Voya Investment Management

For individual investors, Voya has a lineup of over 40 mutual funds covering such diverse asset classes as equities, infrastructure, real estate, hard currency and bonds. In addition, the company maintains a roster of target-date funds whose end dates range from 2020 to 2060 in five-year increments.

Alongside traditional mutual funds, many of these strategies also come in 40 variable portfolios that are available exclusively within variable annuity contracts.

Voya also provides portfolio management services to investment companies, small businesses, pooled investment vehicles, large businesses, selection of other advisors including private mutual fund managers and publications and newsletters.

For individual investors, Voya provides the following services:

  • Portfolio management
  • Selection of portfolio managers
  • Wrap programs
  • Publications of newsletters

How Voya Investment Management invests your money

Voya runs a number of index funds and strategies. For actively-managed strategies, Voya seeks to uncover value before the rest of the market. Voya uses the insights of its analysts for fundamental research into these hidden opportunities.

In addition, Voya has a number of equal-weighted funds. Unlike market-weighted portfolios, the strategy most index funds follow, equal-weighted funds allocate the same amount of assets to each name in the portfolio. The strategy is intended to minimize concentration in the market’s largest companies. Voya’s Corporate Leaders 100 and Global Perspective are two funds that employ this strategy.

In fixed income, Voya applies a macro view alongside bottom up security selection. In addition, Voya applies environmental, social and governance factors in its security selection when the managers believe it’s appropriate.

Portfolio/Fund Name Investment Strategy
Voya CBRE Global Infrastructure Infrastructure
Voya Corporate Leaders 100 Large Blend
Voya Diversified Emerging Markets Debt Emerging Markets Bond
Voya Emerging Markets Hard Currency Debt Emerging Markets Bond
Voya Floating Rate Bank Loan
Voya GNMA Income Intermediate Government
Voya Global Bond World Bond
Voya Global Corporate Leaders World Large Stock
Voya Global Diversified Payment World Allocation
Voya Global Equity Dividend World Large Stock
Voya Global Equity World Large Stock
Voya Global Multi-Asset World Allocation
Voya Global Perspectives Fund World Allocation
Voya Global Real Estate Global Real Estate
Voya High Yield Bond High Yield Bond
Voya Intermediate Bond Intermediate Core-Plus Bond
Voya International High Dividend Low Volatility Foreign Large Value
Voya Investment Grade Credit Corporate Bond
Voya Large-Cap Growth Large Growth
Voya Large Cap Value Large Value
Voya MidCap Opportunities Mid-Cap Growth
Voya Mid Cap Research Enhanced Index Mid-Cap Blend
Voya Multi-Manager Emerging Markets Equity Diversified Emerging Markets
Voya Multi-Manager International Small Cap Foreign Small/Mid Blend
Voya Real Estate Real Estate
Voya Russia Miscellaneous Region
Voya SMID Cap Growth Mid-Cap Growth
Voya Securitized Credit Multisector Bond
Voya Short Term Bond Short-Term Bond
Voya SmallCap Opportunities Small Growth
Voya Small Company Small Blend
Voya Strategic Income Opportunities Nontraditional Bond
Voya Target In-Retirement Target-Date Retirement
Voya Target Retirement 2020 Target-Date 2020
Voya Target Retirement 2025 Target-Date 2025
Voya Target Retirement 2030 Target-Date 2030
Voya Target Retirement 2035 Target-Date 2035
Voya Target Retirement 2040 Target-Date 2040
Voya Target Retirement 2045 Target-Date 2045
Voya Target Retirement 2050 Target-Date 2050
Voya Target Retirement 2055 Target-Date 2060
Voya U.S. High Dividend Low Volatility Large Value

Fees Voya Investment Management charges for its services

Typically, Voya Investment Management charges a percentage of AUM to manage clients’ money, though sometimes Voya has other billing arrangements in place.

For individual investors in Voya’s mutual funds, fees range from around 0.50% for the target date funds to 2.00% for the Voya Russia Fund. In addition, the A shares of the firm’s funds levy a 5.75% maximum upfront commission. However, investors can have the front-end load amount reduced with higher deposit amounts.

In addition, Voya also provides wrap program services to broker-dealers. If Voya is selected to be the investment, clients will pay one fee to their broker-dealer for Voya’s service and Voya bills the broker-dealer. In those cases, Voya charges less to the broker-dealer for its services than it would normally charge. However, clients may pay more than going to Voya directly.

Equity Funds Class A Shares Commissions
Total balance Fee
Up to $49,999 5.75%
$50,000-99,999 4.50%
$1 million-249,999 3.50%
$250,000-$499,999 2.50%
$500,000-999,999 2.00%
Over $1 million 0.25%-0.35% 12b-1 fees and 0.25% tail fee for 13 months
Fixed Income Funds Class A Shares Commissions
Total balance Fee
Up to $100,000 2.50%
$100,000-$499,999 2.00%
Over $500,000 N/A

Voya Investment Management’s highlights

  • Covers all bases: Voya’s investment lineup is exhaustive. In addition to typical asset classes, such as equities and fixed income, Voya also has offerings in alternative investments like real estate, global real estate, hard currency and Russian companies. Sophisticated investors who want exposure to these niche areas will be able to complete their portfolios, however, they might be assuming additional risk.
  • High customization: In separately managed accounts, Voya will tailor investments to the individual needs of its clients, such as excluding certain industries and securities if clients have an objection or emphasizing environmental, social and governance factors for those who prioritize that in their investments.
  • Best place to work: Over the years, Voya Investment Management has landed on several lists as a best place to work. For example, in 2019, the firm made it to Pension & Investment Magazine’s “Best Places to Work in Money Management” for the fifth consecutive year. In 2018, the firm was recognized as a “Best Place to Work for Disability Inclusion” by the American Association of People with Disability and the U.S. Business Leadership Network.
  • Low fees: While the gross expense ratio of Voya’s mutual funds seem high, the firm has contractually agreed to waive certain fees. As a result, many of Voya’s mutual fund fees are classified as either “below average” or “low” by Morningstar, the fund research company. On the other hand, A shares of the funds carry a 5.75% upfront commission.

Voya Investment Management’s downsides

  • Few offerings for individual investors: Voya Investment Management’s services are limited to investment management and don’t include financial planning. Further, its focus on institutional investors and high net worth clients mean that individuals who want to invest in Voya funds will first need to find a financial advisor (and pay a commission) to help them invest.
  • Collects performance fees: Voya’s use of performance fees could potentially push portfolio managers to take on additional risk in an effort to boost performance.
  • Potential conflicts of interest: Some Voya Investment Management employees are also registered representatives of Voya Investment Distributors and can receive a commission for the sale of investments managed by Voya. This creates an inherent conflict of interest since these representatives receive financial remuneration for their recommendations.
  • Could be on the auction block: Voya Financial, the parent company of Voya Investment Management, held talks to sell itself in late 2019 with several big insurance companies. Though the talks didn’t result in a sale, there’s speculation that the firm could be on the market with private equity companies in the mix of potential buyers. A sale could result in some disruption for investors as the company transitions from one owner to another.

Voya Investment Management disciplinary disclosures

In 2013, two directors of ING Pomona Private Equity, a closed-end fund of funds and a Voya affiliate, organized in Luxembourg, ran afoul of Luxembourg securities regulation when they failed to file the annual financial statement in a timely manner with the Luxembourg Commission de Surveillance du Sector Financier. The fund received a fine of 2,000 euros. The directors argued that they are not engaged in day-to-day fund activities such as filing annual statements. What’s more, since the fund is a fund-of-funds, it must first receive financial statements from the underlying portfolios in order to file its own annual statement. Besides the monetary fine, there were no other actions taken.

Voya Investment Management onboarding process

To access one of the Voya funds or strategies you’ll need to go through an intermediary, whether that’s a financial advisor or a retirement plan at work. You can get a prospectus for a Voya Investment Management fund by calling 800-992-0180.

Is Voya Investment Management right for you?

Voya has a wide range of investment options that can be the backbone of most people’s investment portfolios. It’s suite of below average and low-fee funds (after sales charges) speak favorably of the line.

However, because Voya’s primary business is institutional, individual investors can only access Voya’s investment strategies through an intermediary such as a financial advisor or in a workplace retirement plan. Advisors who sell Voya funds collect an upfront commission, giving them a financial incentive to do so. Investors need to weigh whether the added cost, plus the potential conflict of interest, are worth it.

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Source: https://www.magnifymoney.com/blog/investing/voya-investment-management-review-ria/

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