Plus, American Beacon introduces a new fund, Fidelity cuts B shares, and more.
After nearly 12 years of "investing in the companies that support America's #1 spectator sport," the board of StockCar Stocks Index
American Beacon Launches New "Liquidity Premium" Funds
American Beacon Advisors launched two new mutual funds that seek to capture excess returns by investing in illiquid securities.
American Beacon Zebra Large Cap Equity
Founded in 2001, Zebra Capital's co-founders are Roger Ibbotson, Ph.D., chairman and chief investment officer, and Zhiwu Chen, director of research. They are both professors of finance at Yale University and will both be comanagers on the fund.
Ibbotson sold his consulting company, Ibbotson Associates, to Morningstar in 2006. Ibbotson currently acts in a management advisory role for Morningstar.
Zebra selects securities by analyzing their liquidity metrics (such as turnover and trading volume) relative to their fundamentals. It uses these observable, relative liquidity measures to construct a portfolio that invests more heavily in stocks with strong fundamentals that are traded less often than stocks with comparable traits.
The funds' strategy is designed to generate higher returns over time, driven by three factors: Less liquid stocks generally trade at a discount; individual stocks move in and out of favor, reverting toward mean liquidity; and a potential benefit from general worldwide increases in the liquidity of markets.
Neither fund will charge a redemption fee even though large and sudden outflows of shareholder capital could have a dramatic effect given each fund's makeup of relatively illiquid securities.