Eaton Vance Tries to Get a Piece of the Stimulus Action
Plus, PIMCO investment process patent pending, and more.
Plus, PIMCO investment process patent pending, and more.
Eaton Vance plans to launch a fund that gives investors a way to buy bonds issued to fund economic stimulus projects.
Build America Bonds are taxable municipal bonds that carry special tax credits and federal subsidies. They were created when President Obama signed the recent economic stimulus bill into law. Because of these subsidies, issuers are often able to offer higher coupon payments than they otherwise would be able to. From April 15, 2009, through August 2009, a total of $28.2 billion of these bonds have entered the market according to Barclays Capital. The provision is set to expire at the end of 2010.
With limited supply and time running out to purchase new issues, it is notable that Eaton Vance is rolling out a new fund that will invest at least 80% of its assets in these bonds. However, they will not be the only managers trying to scoop these issues up. Miriam Sjoblom, Morningstar associate director of fund analysis, notes that other diversified taxable-bond managers have been buying the bonds, often finding them attractive relative to other issues. A prominent example is the team in charge of Dodge & Cox Income (DODIX). They noted in a recent shareholder letter they found some of the bonds to be "a compelling investment opportunity to the investor with a long-term horizon."
PIMCO Investment Process Patent Pending
Can you patent a fund's strategy? That is the question patent examiners will have to answer now that PIMCO, a unit of Allianz (AZ), has filed for a patent on two new managed-payout funds: PIMCO Real Income 2019 and PIMCO Real Income 2029. The two funds use a "laddered" portfolio of Treasury Inflation-Protected Securities, meaning maturities are structured over a predetermined time frame to generate systematic, inflation-adjusted distributions. The firm believes this strategy is unique enough to warrant patent protection. The funds are intended for retirees who require predictable income distributions.
If PIMCO is successful, no other fund will be able to use the strategy without licensing permission from the company.
Artio Continues with Plans for U.S.-Based IPO
On Wednesday, Swiss bank Julius Baer Holding Ltd. said it will commence its long-awaited plans for an initial public offering of its asset-management business, Artio Global Investors Inc., which in which has been under discussion for more than a year.
The move comes as Julius Baer splits the firm's private banking operations from its asset-management business. The offering is expected to be priced and completed by the end of September, and shares will trade on the New York Stock Exchange under the symbol ART.
Artio plans to use the funds to purchase half of Julius Baer's 70% ownership stake in the firm, and also to buy back shares from CEO Richard Pell and Rudolph-Ria Younes, head of international equity. The pair comanage the $11.2 billion dollar Artio International Equity (BJBIX), which is closed to new investors, as well as the smaller, yet still popular Artio International Equity II (JETAX). Artio expects the firm's daily operations will remain unchanged.
The Investment Company Institute, the fund industry's trade group, recently filed a friend of the court brief with the Supreme Court in support of Harris Associates, the advisor to Oakmark funds, in Jones v. Harris, a controversial fee lawsuit. Joining the ICI on the side of the fund's advisor with their own filings are Independent Directors Council, Mutual Fund Directors Forum, Chamber of Commerce, and Fidelity Management & Research Company.
JP Morgan is the latest firm to drop class B shares from each of its funds. According to Morningstar data, more than 400 mutual funds have eliminated at least one share class through June 30, 40% more than in the same period a year earlier.
Harbor Funds announced it's liquidating Harbor Small Company Growth on Oct. 30. Harbor has temporarily reopened Harbor Small Cap Growth until then so Small Company Growth shareholders can move their money into the sibling fund if they want.
Roger Hamilton is off the team at John Hancock Financial Industries (FIDAX). This move leaves longtime manager Lisa Welch to run the fund along with her relatively new comanager Susan Curry, who joined her at the helm in 2008.
Jefferies Asset Management, a unit of Jefferies Group , and John Hancock, the Boston firm owned by Manulife (MFC), have filed documents with the SEC to launch ETFs. The move follows the actions of other firms, like PIMCO, who have recently entered the ETF space.
Barely over a year and a half since its inception, Henderson Global Real Estate Equities is set to be liquidated around Sept. 30. This comes as little surprise, as the fund has struggled to gather assets. It currently has $767,000.
Huntington Balanced Allocation, Huntington Conservative Allocation, and Huntington Growth Allocation will activate 12b-1 fee plans. The 12b-1 activation will not affect fees through July 31, 2010, due to an expense limitation. After that date, the expense limitation is subject to revision.
Dreyfus is putting up for vote the merger of Dreyfus State Muni Bond MI , Dreyfus State Muni Bond NC , and Dreyfus State Muni Bond VA with Dreyfus AMT-Free Municipal Bond (DMUAX). Also Dreyfus General New York Municipal Bond is set to merge with Dreyfus New York AMT-Free Municipal Bond (PSNYX), pending shareholder approval.
Fund analysts Jonathan Rahbar and David Falkof contributed to this report.
Ryan Leggio does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.