AMR bankruptcy doesn't ground mutual funds, and more.
Reports that Deutsche Bank is considering the sale of its U.S. asset-management division are not surprising given the disappointing record of its DWS mutual fund arm here. But a possible sale also introduces uncertainty for investors in DWS' U.S. funds.
DWS grew in the United States primarily through a string of acquisitions in the early 2000s--including the purchase of Scudder Investments in 2002. The ensuing integration was piecemeal and contributed to DWS' disparate investment culture. DWS was implicated in the market-timing scandal in 2003. Since that affair, the firm has struggled to rebuild its business and reputation in the U.S. Starting in mid-2003, when the SEC initiated its market-timing investigation, DWS funds have suffered average estimated quarterly net outflows of $682 million through October 2011, according to Morningstar data.
DWS has attempted to make its lineup more competitive by reducing its number of fund offerings and transferring management responsibilities for 10 of its equity funds, including some of its largest, to more-established management teams in Frankfurt, Germany. The lineup does have a few bright spots, including its municipal funds, but these efforts haven't been enough to tip the scales. More than half of the firm's funds rank in the bottom half of their respective categories over the past three and five years, and there are signs that the firm's investment culture has continued to deteriorate since Morningstar issued its stewardship report in 2010.
Talk that DWS' U.S. fund business is up for sale heated up after Deutsche Bank announced last week that it put its global asset-management business up for strategic review. It doesn't seem that the sale includes the DWS mutual fund businesses in Europe and Asia.
It is uncertain how a possible sale will impact DWS' U.S. funds, so investors in those funds should be vigilant for any developments that could ensue. Meanwhile, Morningstar analysts are also keeping a close eye on the situation and will be looking again at the fund family’s Stewardship grade in light of events.
Insider-Trading Probe Strikes Neuberger Berman: Reports
A Neuberger Berman analyst is a target of an insider-trading probe, according to reports by The Wall Street Journal and other news outlets Wednesday. A company spokesperson said Neuberger Berman has not been contacted by any regulators or investigators about the matter, but they put the analyst on paid leave as a precautionary measure.
The analyst, who joined Neuberger Berman in 2005, works as one of roughly 40 equity analysts with the firm, according to the spokesman. Within that larger group, the analyst serves as part of a five-member analyst team covering the technology, media, and telecommunications sectors. Portfolio managers throughout the firm were able to draw on this team's research, although the analyst did not serve any specific fund, the spokesperson said.
Wellington to Provide Welcome Relief at Hartford Total Return
Hartford has a holiday gift for shareholders in Hartford Total Return Bond ITBAX. Wellington Management, which has a long successful history subadvising fixed-income funds at Vanguard, will take the reins managing Hartford Total Return Bond in the first quarter of 2012.