Plus, news on new Janus CIOs, fund-related political action, and more.
Vanguard Strategic Equity
Vanguard closed Strategic Equity and imposed the investment restrictions on Windsor II and Wellington in April because the funds had attracted a lot of assets due to strong performance. Too much asset growth too fast can hamper a fund manager's efforts to execute his or her strategy.
Net cash flows into the fund have cooled since Vanguard took the action, so the family decided to ease the restrictions. At $7 billion for Strategic Equity, $46 billion for Windsor II, and $44 billion for Wellington, asset levels are still extremely large for their respective categories, though. Vanguard said it would continue monitoring the funds' assets and investors should, too.
Hartford Settles with SEC
On Nov. 8, the SEC announced that it had settled with three subsidiaries of Hartford Financial Services Group for using brokerage commissions from 61 broker/dealers to pay for the marketing and distribution of Hartford mutual funds and annuities.
The arrangements that drove the charges are commonly referred to as "directed brokerage." The arrangements took place between 2000 and 2003 and caused shareowners to pay costs that Hartford had specifically told them it would pay; the SEC further says that Hartford misled the funds' boards concerning this practice. A payment of $55 million ($40 million of it in "ill-gotten gains" and a $15 million penalty) will be returned to the funds. The fine, while the heaviest yet assessed for such practices, is in the same range as the $30 to $50 million fines levied against Ameriprise, Putnam, and MFS.
Click here to read the SEC's press release about the settlement.
HighMark Funds' Parent Under Investigation
The parent of HighMark funds disclosed in a regulatory filing that the fund family is being investigated based on its relationship with a third-party administrator.
Media reports speculate that regulators are focusing on HighMark's relationship with SEI Investments