Skip to Content
Fund Times

Fund Times: Big Changes at DWS High Income Shop

Plus, news on Janus long/short fund launch, new Thornburg global fund, and more.

Mentioned: , , , , , ,

Deutsche Investment Management, advisor to DWS funds, announced a restructuring of the firm's high-income operation. The plan will centralize the high-yield effort, which was previously spread out over three separate teams located in Germany, Philadelphia, and New York. The Philadelphia team will be disbanded entirely, and the firm's high-yield group will now be headquartered in New York. Gary Sullivan, who previously ran high-yield funds for Deutsche in Germany, will take over lead manager responsibilities for DWS High Income (KHYAX), DWS High Income Plus (SGHAX), and DWS Strategic Income (KSTAX) from Andrew Cestone, who headed the high-yield group in Philly. Sullivan will also replace Cestone as one of the managers of DWS Balanced (KTRAX) and DWS Equity Income (SDDAX). Cestone will be leaving the firm.

We're sorry to see Cestone go because we were quite impressed with his abilities at these funds. In fact, over the past three years, through Aug. 2, Cestone's performance at High Income has bested 90% of high-yield rivals, with an impressive 10.6% annualized gain. Sullivan, on the other hand, is an unknown quantity. He managed high-yield portfolios in Europe, but he has no record in the United States. A Deutsche spokesman noted that the restructuring was entirely business related and was no reflection on Cestone and his team, but we're not convinced that it makes good business sense to let a talented manager like Cestone go. We'll be keeping an eye out to see where Cestone lands, because there are plenty of high-yield operations in need of good talent.

Lawrence Jones does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.