Plus, another new global fund, manager changes, fines, and more.
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Allianz NFJ Small-Cap Value
Fine on American Funds Distributors Stands
The Financial Industry Regulatory Authority has upheld a $5 million fine levied in 2006 on American Funds Distributors for directed-brokerage agreements dating from 2001 through 2003. Directed-brokerage means American Funds and its AFD sales force channeled mutual fund trading business and brokerage commissions to securities firms who also sold a lot of American Funds. This is a violation of FINRA's Anti-Reciprocal Rules, which seek to curb conflicts of interest that might ultimately harm investors. According to FINRA's press release, its adjudicatory body reaffirmed that AFD "deliberately formed directed brokerage arrangements" with the top sellers of its funds, and then told the investment advisor (the firm that manages American Funds--Capital Research & Management) the amount of commission business each firm should receive. Importantly, while the fine still stands, the FINRA committee noted that it found no evidence of harm to American Funds shareholders.
MainStay-ICAP Joins the Global Fund Fray
MainStay Investments and subadvisor Institutional Capital, in which MainStay is a shareholder, will launch a new fund: MainStay ICAP Global. Available today, the fund seeks to outperform the return of the MSCI World Index. Initial filings indicate it will own between 50 and 80 stocks, many of which the firm already owns in Analyst Picks MainStay ICAP Select Equity
This fund follows a trend. In recent months, Dodge & Cox, Vanguard, Wasatch, and others have announced plans for, or launched, global funds.
BlackRock Plans Large-Cap Index Fund
BlackRock plans to offer an S&P 500 index fund, according to regulatory filings. BlackRock Index Equity's cheapest share class, its institutional shares, may not be easily available to individuals who don't use an advisor. The minimum investment in these shares, which will charge a reasonable 0.15%, is $2 million. Registered Investment Advisors may access institutional shares for their clients with a minimum investment of $250,000. Otherwise, A shares of the fund will charge 0.36% along with a 3.0% front-end load.
Legg Mason Partners Fund Gets New Comanager
Derek Deutsch has replaced Brian Posner, the departing executive of subadvisor Clearbridge Advisors, as comanager at Legg Mason Partners Capital
Fidelity Introduces New Managers to Several Select Funds
Four sector- or industry-focused Fidelity funds get new managers today. The first is Brian Wilhelm, who takes over for Stephen Hermsdorf at Fidelity Select Insurance
Two other Select funds may be getting their managers for a limited time. The firm often rotates promising analysts among sector funds before giving diversified funds to run. At Fidelity Select Defense & Aerospace