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Matthews Pacific Tiger Fund to Slow Inflows

The Gold-rated Matthews fund will undergo a change to protect the integrity of its investment process. Also, Goldman Sachs Asset Management's Rob Cignarella exits, Dreyfus rolls out a floating-rate fund, RiverPark launches a "strategic income" fund, Nomura to exit the U.S. fund business, and ...

Robert Goldsborough, 10/18/2013

Matthews International Capital Management recently announced that Gold-rated Matthews Pacific Tiger MAPTX will close to most new investors on Oct. 25. The firm is closing the fund, which has $7.6 billion in assets, in an effort to slow the pace of inflows and protect the integrity of its investment process. The firm has made similar closures in the past, and such closures serve the interests of current fundholders.

Goldman High-Yield Manager Cignarella Departs the Firm
Rob Cignarella, comanager of Neutral-rated Goldman Sachs High Yield GSHAX, left the firm on Oct. 11, 2013. He'd served in that role since 2003 and joined GSAM's fixed-income team as an analyst in 1998. Michael Goldstein, who's shared comanager responsibilities here since late 2010, remains on board and is now the fund's sole manager. Prior to joining the firm, Goldstein ran Lord Abbett High YieldLHYAX from 1998 to 2010 with good results. Longtime team member Rachel Golder, who oversees all corporate credit research at the firm, remains involved here as well. While Goldstein's experience is a plus, this fund has seen plenty of investment team turnover since 2009. That was the year longtime lead manager Andrew Jessop left, as did experienced comanagers Diana Gordon and Roberta Goss. The high-yield team lost several analysts through the following year. GSAM has made hires since then accounting for roughly half of the high-yield analyst team located in New York and an additional five analysts based in Bangalore, India.

Vanguard Announces Fee Cuts, Fund Mergers
Check out the special Fund Times from Wednesday about Vanguard's decision to implement an array of changes that will make it cheaper to invest with the firm. Vanguard also will merge away five funds.

Dreyfus Launches Floating-Rate Fund
With an eye toward interest rates rising further, Dreyfus recently rolled out a fund aimed at offering investors income by investing in floating-rate loans.

Dreyfus Floating Rate Income Fund DFLAX, which launched at the end of September, is subadvised by Alcentra NY, LLC, which like Dreyfus is a subsidiary of ank of New York Mellon BK. Manager William Lemberg is the head of Alcentra's U.S. loan platform and is primarily responsible for the fund's floating-rate loans, while manager Chris Barris is principally responsible for the fund's high-yield, fixed-rate securities.  Both managers follow Alcentra's value-oriented, bottom-up research process, which incorporates a macroeconomic overlay.

The launch comes on the heels of strong inflows into the floating-rate fund category and several other fund firms recently rolling out floating-rate note funds. This year alone, Babson, Oppenheimer, Metropolitan West, and DoubleLine all have brought new floating-rate funds to market.

RiverPark Rolls Out Strategic Income Fund
As investors continue to crave income in an environment of still-ultralow interest rates, RiverPark Advisors recently launched a fund aimed at offerings investors a high level of income through a portfolio of bank loans, high-yield bonds, preferred stock, convertible bonds, stocks, and both investment-grade and non-investment-grade debt.

Subadvised by Pleasantville, N.Y.-based Cohanzick Management LLC, RiverPark Strategic Income RSIVX is the latest offering from RiverPark, which was founded by Baron Funds alumni in 2006. The firm, which now has more than $2 billion in assets across seven funds, has had several launches that have gained considerable traction with investors so far, including the subadvised RiverPark/Wedgewood RWGFX (which is Silver-rated) and RiverPark Short Term High Yield RPHIX funds. Most of the firm's funds had done well relative to their benchmarks and peer groups. However, a majority of RiverPark's funds are three years old or less, and the firm has liquidated a couple of struggling offerings.

With Cohanzick, the new strategic income fund has the same subadvisor as RiverPark Short Term High Yield Fund. In managing the strategic income fund, Cohanzick takes a bottom-up approach to selecting securities and also considers economic factors such as the effect of interest rates on investments.

Nomura Closes All 5 Remaining Funds to Purchases and Exchanges, Plans to Exit U.S. Market
On Oct. 15, Nomura Partners Funds announced that effective immediately, it has closed all of its remaining five mutual funds to purchases and exchanges.  The firm also announced that it is planning to exit the U.S. retail mutual fund business.

Nomura, which entered the U.S. market in 2008 when it took over the management of The Japan Fund NPJAX from Fidelity, has struggled to find a place in the U.S. fund market. After taking over the Japan Fund, Nomura then launched a variety of Asian-oriented funds for U.S. investors, some of which it closed in 2012. Last month, Nomura closed three more funds.

Of its remaining five funds, the largest is The Japan Fund, with $191 million in assets. None of its other funds has more than $60 million in assets. Its other funds are Nomura Partners High Yield NPHAX, Nomura Partners Asia Pacific Ex JapanNPAAX, Nomura Partners Global Equity Income NPWAX, and Nomura Partners Global Emerging Markets NPEAX.

2 Foreign Firms Planning to Enter U.S. Fund Market
Recently, two overseas financial-services firms have submitted filings with the SEC seeking approval to issue U.S. mutual funds.

First, last month, Spanish bank Santander filed with U.S. regulators for permission to offer three funds of funds, which would be named Santander Select Conservative FundSantander Select Moderate Fund, and Santander Select Growth Fund. All three proposed funds would have A, C, and I share classes. The proposed conservative fund would tilt heavily toward funds investing primarily in bonds, with a small allocation to funds that primarily invest in equities, while the proposed growth fund would do the opposite. The proposed moderate fund would aim to have a 50-50 exposure between stocks and bonds.

The move into the fund world comes at the same time that Santander has been rebranding some 750 U.S. branches from the name Sovereign Bank to the Santander name. (Santander acquired Sovereign in 2009.) Such a move would be one obvious distribution channel for the proposed funds. Also, earlier this year, Santander's parent, Banco Santander SA SAN, sold half of its asset management unit to two private equity firms.

Next, on Oct. 4, Bank Bradesco BBD, one of Brazil's largest banks, filed for permission to launch two U.S. funds focusing on Latin American stocks and Brazilian bonds.

Both proposed funds would have A, C, institutional, and retail share classes. The proposed Bradesco Latin American Equity Fund would hold companies that either trade or are based in Latin America or that derive at least half of their revenue from countries in Latin America. The proposed Bradesco Brazilian Hard Currency Bond Fund would invest in fixed-income and floating-rate bonds issued by the Brazilian government and other issuers and agencies whose obligations are guaranteed by Brazil’s government. Both proposed funds would be managed by Brazil-based managers who work for Bradesco subsidiary Bradesco Asset Management and already manage those same strategies locally. The proposed Latin American stock fund would be managed by Herculano Anibal Alves, Roberto Sadao Arai Shinkai, and Pedro Angeli Villani, while Reinaldo Le Grazie, Clayton Rodrigues, and Leonardo Portugal would be at the helm of the proposed Brazilian bond fund.

Senior fund analysts Karin Anderson and William Samuel Rocco and fund analyst Kathryn Spica contributed to this report.

 

 

 

Robert Goldsborough is an ETF Analyst at Morningstar.
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