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Leuthold to Merge Asset Allocation Fund Into Core Fund

The manager of Leuthold Asset Allocation, which has been reeling from outflows, has left the firm, prompting the merger. Also, AllianceBernstein changes named managers in its target-date series and target-risk suite, ING swaps out managers on its asset-allocation team supporting multiasset funds, ...

Morningstar Fund Analysts, 09/05/2013

The lead manager of Neutral-rated Leuthold Asset Allocation LAALX, Eric Weigel, has left the firm. The fund will be merged into Bronze-rated flagship offering Leuthold Core Investment LCORX. Weigel was just installed as lead manager in December 2012, and he had put a new strategy in place there to further differentiate the fund from Core Investment; the two had previously used the same asset allocation approach but constructed their equity portfolios differently. However, the firm found that investors in Asset Allocation wanted it to more closely resemble Core (which had been closed to all new investments when Asset Allocation was launched in 2006). As both funds have shrunk substantially in size recently due to outflows amid weak performance, the firm decided to merge the two. The merger is expected to take place by the end of October.

AllianceBernstein Swaps Out Managers of Target-Date Series, Target-Risk Suite
AllianceBernstein AB has restructured its multiasset investment team, leading to changes in the named managers of its target-date series, AllianceBernstein Retirement Strategies, as well as its target-risk suite, AllianceBernstein Wealth Strategies. The target-date series has one of the worst long-term records among peers and has a Morningstar Analyst Rating of Negative.

The firm has created an investment unit dedicated to strategies that invest in multiple asset classes. The new Multi-Asset Solutions investment unit is led by Dan Loewy and Vadim Zlotnikov, two AllianceBernstein veterans who also have been named managers to the firm's target-date and target-risk series. All told, the team will oversee $90 billion of multiasset investments. Loewy has helped lead asset-allocation strategies, including the Dynamic Asset Allocation strategies, over his 17 years at the firm. Zlotnikov's specialty is equity and capital-markets research. He also runs a factor-based trading strategy for the firm and is well-known to the firm's sell-side clients.

Leaving the series is Seth Masters, former CIO of Defined Contribution and a manager of the series since 2005; he'll be exclusively working in AllianceBernstein's private client business. Dokyoung Lee, a manager since 2008, is leaving the firm. Remaining on the series are Christopher Nikolich, a manager since 2005, and Patrick Rudden, named since 2009. Both Nikolich and Rudden now report to Zlotnikov.

Manager Change on ING Asset-Allocation Team Supporting Multi-Asset Funds
ING ING has made a change to the asset-allocation management team supporting its multiasset funds, including the Neutral-rated ING Solution target-date funds. Heather Hackett, a named portfolio manager on the target-date funds since 2009, is being removed from the portfolio management team, though she remains at ING as part of the multiasset group, focusing her efforts on the fixed-income side of asset-allocation research.

Replacing Hackett is Frank Van Etten, Deputy Head of ING's Multi-Asset Strategies and Solutions group. Van Etten has been with ING since 2002, working in the parent company's headquarters in the Hague since 2002 and located in New York since 2010.

This change is the latest tweak to the asset-allocation team, following a more significant move in August 2012, when Halvard Kvaale joined the group as the new head of manager research. Paul Zemsky remains the head of the group.

American Funds to Launch Emerging-Markets Offering
Capital Group's American Funds have filed to launch a new emerging-markets stock fund. The American Funds Developing World Growth and Income Fund will invest primarily in emerging-markets companies or firms that drive significant portions of their revenue from emerging-markets consumers. The filing suggest the new offering will be a more intrepid and purer play on developing-markets equities than the firm's Gold-rated American Funds New World NEWFX, which splits its portfolio between emerging- and developed-markets stocks, and emerging-markets debt. Compared with other diversified emerging-markets funds, New World has only a 43% emerging-markets allocation versus the typical competitor's 72% stake. Developing World Growth and Income's mandate, in contrast, calls for a minimum 80% allocation to companies based in or with significant ties to developing countries. A team of comanagers will run sleeves of the new fund, which is common practice at American Funds offerings.

Morningstar fund analysts cover more than 1,700 mutual funds and write regular commentary covering fund industry news, fund investing trends, picks, portfolio planning, international investing, and more.

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