Manager Departs Ariel Appreciation
Plus, JPMorgan pays arbitration award to American Century and more.
Plus, JPMorgan pays arbitration award to American Century and more.
Matthew Sauer has stepped down as a portfolio manager at Ariel Appreciation (CAAPX) in order to take a similar position at Lateef Investment Management.
For Sauer, the move marks a reunion with an old colleague. James Tarkenton, a comanager of Lateef (LIMAX), previously worked with Sauer at Oak Value Capital Management. Sauer was a manager of Oak Value between 2003 and 2006. (That fund is now known as RS Capital Appreciation .) At Lateef, Sauer will be a director and portfolio manager. Lateef, a boutique firm located outside San Francisco, manages $4 billion in separate accounts and the retail mutual fund.
Sauer's departure is a blow to Ariel Appreciation, which has received a Morningstar Analyst Rating of Bronze, but not a disaster. The fund uses a team-based approach consisting of Sauer, John Rogers, Ariel's founder, and Timothy Fidler, who also helps run Ariel Focus (ARFFX). Two of the three managers had to be on board with any holdings decisions. Rogers announced in a letter to clients that there are no plans to replace Sauer and that he and Fidler will remain as comanagers. Sauer's coverage list will be divvied up among the three senior members of the firm's research team. Rogers also said that plans were already in the works to hire a senior analyst before Sauer resigned. That should help fill any holes left by his exit. Ariel Appreciation is in the top 30% of the mid-cap blend peer group the past 15 years, and its strong 16% year-to-date gain through March 28, 2012, lands it in the top decile of that same category.
Tradewinds CIO Departure Triggers Fund Liquidation
Tradewinds, a subsidiary of Nuveen Investments, announced it will liquidate Nuveen Tradewinds Global All-Cap Plus in May. The firm's CIO and co-president David Iben had run the fund since its December 2008 inception using a 130/30 strategy that held long and short positions in stocks. The filing to liquidate the fund comes just weeks after Iben announced that he will leave Tradewinds in June to join Vinik Asset Management. The fund had not gained much traction, with $51 million in assets as of March 2012.
JPMorgan Pays Arbitration Award to American Century
The asset management division of JPMorgan (JPM) paid a $373 million arbitration award to American Century in the third quarter of 2011. New details surrounding the award were recently reported by Fortune.
American Century filed the litigation in 2009 as a result of a contract dispute with JPMorgan. Legal documents reveal American Century alleged JPMorgan breached a 2003 revenue-sharing contract that involved the placement of each firm's funds on retirement platforms. The contract required JPMorgan to promote American Century funds alongside its own in the retirement plans. But JPMorgan instead favored its own funds at the expense of American Century's, according to the documents. JPMorgan has a long history of involvement with American Century. In 1998, JPMorgan bought a 45% noncontrolling position in American Century. That position, though, was sold to Canadian bank CIBC in August 2011 when American Century exercised an option to buy back the stake.
More Changes at Hartford
Hartford announced that the mutual fund family's board of directors approved a new subadvisor for several of its funds. On or around June 30, 2012, Wellington Management will take over the day-to-day manager duties at Hartford Balanced Allocation (HBAAX), Hartford Conservative Allocation (HCVAX), Hartford Floating Rate (HFLAX), Hartford Floating Rate High Income (HFHAX), Hartford Small/Mid Cap Equity (HSMAX), and at the Hartford Target Retirement series. This is part of a broader move by Hartford to shift management duties from in-house teams to Wellington. Wellington already manages Hartford Advisers (ITTAX). Hartford announced that this fund will be renamed Hartford Balanced and Karen Grimes will replace Steven Irons as a portfolio manager.
The Dividend Bandwagon Keeps Rolling
It's not too late to join the dividend party, according to some fund firms. Guinness Atkinson will launch an inflation-managed dividend fund, with a global mandate to seek out income-paying equities. Elsewhere, Nuveen filed to launch two dividend-focused funds: Nuveen Santa Barbara Global Dividend Growth and Nuveen Santa Barbara International Dividend Growth. While these funds put an international spin on the dividend theme, they also follow a broader industry trend. During the past three years, 42 dividend-focused funds have launched, including 21 during the past 12 months. Dividend-focused strategies have regained popularity as investors search for income in a low-yield world.
Etc.
Prudential Jennison International Opportunities will launch on June 5, 2012. The fund will invest in equities issued by non-U.S. companies, including companies located in emerging markets. Mark Baribeau and Thomas Davis will manage the fund. The fund's A shares will levy a 1.60% annual expense ratio.
Ivy Funds filed to launch Ivy Global Equity Income in June 2012. The fund will invest in stocks issued by companies in mainly developed non-U.S. markets. John Maxwell will manage the fund.
Adam Petryk has been named the chief investment officer of Batterymarch, an affiliate of Legg Mason. He was previously the firm's deputy chief investment officer, a senior portfolio manager and co-head of the developed markets team. As part of his new role, Petryk will step back from his comanager duties at Legg Mason Batterymarch International Equity (LGIEX), Legg Mason Batterymarch Global Equity (CFIPX), Legg Mason Batterymarch S&P 500 Index (SBSPX), and Legg Mason Batterymarch U.S. Small Cap Equity (LMSIX). He is also no longer a named manager on the firm's U.S. large-cap and real return strategies. The existing comanagers at each of those funds remain in place, though.
Mutual fund analysts David Falkof, Flynn Murphy and Rob Wherry contributed to this report.
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