Plus, news on new Turner funds, Causeway's emerging-markets fund, and more.
The recently announced buyouts of copper producer Phelps Dodge
The day Freeport-McMoRan bid for Phelps Dodge the stock rose nearly 30%, and Equity Office Properties saw a 7% increase after the Blackstone Group made its offer. Funds that benefited from the Phelps deal include Brandywine Fund
While buyouts can often be good news for equity funds, they are typically bad for bondholders. This is because the additional leverage used to finance the deal can impair the company's ability to repay its obligations. Additionally, the credit quality of the company can deteriorate, resulting in higher borrowing costs. In the case of Equity Office Properties, however, certain bondholders should do okay. Protective covenants embedded in the bonds held by Standish Mellon Fixed-Income
Turner Files for Two New Funds
Turner Investment Partners has filed with the SEC to offer two new mutual funds, Turner International Core Growth and Turner Midcap Equity. The International fund, which will only be offered in an institutional share class, will be run by Mark Turner, Christopher McHugh, and Robert Turner. The fund will primarily invest in the stock of international firms with market caps larger than $2 billion, which management believes will see improving earnings growth. Both Mark and Robert Turner run Turner Core Growth I
McHugh works as the lead manager on Turner Midcap Growth
Turner Midcap Equity will be managed by the same team that runs Turner Small Cap Equity
Causeway to Launch New Emerging-Markets Fund
Causeway Capital Management has announced its plans to launch Causeway Emerging Markets, a quantitatively oriented fund run by Arjun Jayaraman and Macduff Kuhnert. The fund will typically keep at least 80% of its assets in emerging-markets securities, and the quantitative model will use various fundamental, technical, and macroeconomic factors in selecting stocks.
While we'll wait and see exactly how the quantitative approach functions, we're encouraged here by the advisor's success with one of its other funds, Causeway International Value