Plus news on American Funds, Ameristock ETFs, T. Rowe Price, WM Funds, and more.
Small-cap specialist Royce & Associates has filed a prospectus with the SEC to launch the firm's first internationally focused funds: Royce International Value Fund and Royce Smaller-Companies International Fund. The prospectus suggests that both funds will be run by the firm's chief investment officer, Chuck Royce, who has distinguished himself at offerings such as Royce Heritage
According to the prospectus, the all-cap International Value Fund will invest at least 65% of assets in international equities, with the remaining 35% going to U.S.-based securities and/or developing-markets firms. Smaller-Companies International will focus 80% of assets in companies with $5 billion or less in market cap, at least 65% of which will be internationally based. Both funds are likely to display Royce's trademark value-based approach.
NASD Fines American Funds for Brokerage Violations
An NASD panel ruled on Aug. 30 that American Funds Distributors (AFD), the main distributor for the American Funds lineup, violated the regulatory body's Anti-Reciprocal Rule, after which it censured AFD and fined the group $5 million.
The violation involved directed brokerage commissions of more than $98 million that AFD's parent, Capital Research and Management, paid to the 50 top sellers of the firm's funds. According to the NASD's statement: "The panel noted that the Anti-Reciprocal Rule was intended to abolish 'reciprocal business practices in connection with the distribution of mutual fund shares; i.e., the use of portfolio brokerage of mutual funds to reward broker-dealers for sales of mutual fund shares.'" However, the panel rejected the (more serious) NASD Enforcement Division arguments that AFD had "engaged in a pattern of misconduct over a period of years that was intentional or at least reckless." The panel stated that, unlike other fund groups, AFD voluntarily changed these practices when regulators brought the violations to light.
Ameristock Launches Fixed-Income ETFs
Nicholas Gerber, founder of the Ameristock Funds group, has recently jumped into the business of offering ETFs. In April, Gerber offered the United States Oil Fund
The funds will carry an expense ratio of 0.15%, which matches the levy charged by Barclay's iShares Lehman Treasury lineup.
T. Rowe Plans Two Muni Fund Mergers
T. Rowe Price has announced it plans two municipal-bond fund mergers. Pending shareholder approval, the Florida Intermediate Tax-Free Fund
In addition, T. Rowe will merge T. Rowe Price Tax-Free Intermediate Bond Fund