Plus, an updated expense ratio for Silver-rated FMI Focus Fund, a new emerging-markets value offering from American Century, PIMCO hires a new equity boss from Schroders, and more.
On Wednesday, Fidelity announced a manager shuffling at Bronze-rated Fidelity Intermediate Bond Fund FTHRX. As part of the change, Robin Foley joined the fund as lead manager, replacing Ford O'Neil. Rob Galusza, who has headed up the fund as lead manager since 2009, will remain on the portfolio as a comanager.
While manager switches can spell trouble, this one is unlikely to mean major changes for shareholders. For starters, Fidelity employs a truly team-based approach in running its fixed-income portfolios, which minimizes the impact of individual departures. Moreover, Foley, a 27-year Fidelity veteran, brings two decades of experience managing short- and intermediate-term bond portfolios at the firm. She and Galusza have a long history of working together and currently serve as comanagers of the similarly run and Bronze-rated Fidelity Short-Term Bond FSHBX. Finally, O'Neil remains with the firm as manager of Gold-rated Fidelity Total Bond FTBFX and will continue to work closely with Foley and Galusza.
More significant changes are underway at Fidelity Advisor Intermediate-Term Bond. As of Wednesday, the fund was renamed Fidelity Advisor Limited Term BondEFIPX and repositioned as a short-term, corporate-focused bond portfolio. As part of the change, O'Neil is also stepping down from his role of comanager of the fund. He will be replaced by David Prothro. Galusza remains as lead manager on the portfolio.
Revised Expense Ratio for FMI Focus
As reported in last week's edition of Fund Times, Broadview Advisors, the longtime subadvisor to Silver-rated FMI Focus FMIOX, will be bringing the mutual fund in-house. Since last week's report, an amended proxy has been filed to correct an error in the calculation of the expense ratio in the original proxy. The revised estimate reports an expected expense ratio of 1.21% for the to-be-formed Broadview Opportunity Fund. While higher than the originally reported estimate of 1.12%, fund shareholders and prospective investors still should experience a slight reduction from the current 1.26% expense ratio as a result of the transition.
American Century Launches Emerging-Markets Value Fund
On Thursday, American Century rolled out a new value-oriented emerging-markets fund that is managed by the firm's quantitative equity team in Mountain View, Calif.
Available in investor, institutional, A, C, and R share classes, American Century Emerging Markets Value Fund is managed by Vinod Chandrashekaran, who is American Century's director of quantitative research, Yulin Long, and Elizabeth Xie. The trio also manages two other very small funds: American Century International Value MEQAX and American Century International Core Equity ACIQX.
The new fund's managers use a two-step process to pick stocks that they believe are undervalued. First, they use quantitative models to rank the stocks of companies based in emerging-markets countries, with an eye toward selecting firms whose characteristics are similar to those in the MSCI Emerging Markets Value Index. Then, they employ portfolio optimization techniques to help construct a portfolio of companies offering an optimal balance between risk and expected return, with the expectation that the portfolio they build can provide better returns than the MSCI benchmark without taking on much extra risk.
Firm officials touted the new fund as an unusual entrant in the market, given that most emerging-markets funds follow either a growth or core strategy. That said, the emerging-markets value category has several large players. On the open-end side, there's the $19 billion DFA Emerging Markets Value DFEVX and two very small funds: AllianzGI NFJ Emerging Markets Value AZMAX and SA Emerging Markets ValueSAEMX. On the exchange-traded fund side, there are several emerging-markets funds with value tilts: WisdomTree Emerging Markets Dividend GrowthDGRE, iShares MSCI Emerging Markets Value EVAL, iShares Emerging Markets Dividend DVYE, SPDR S&P Emerging Markets Dividend EDIV, WisdomTree Emerging Markets Equity DEM, WisdomTree Emerging Markets SmallCap DividendDGS, and EGShares Emerging Markets Dividend Growth ETF EMDG.