A new manager for T. Rowe Price New Era, DWS fires a subadvisor, Matthews launches 2 Asia funds and makes manager changes on 2 other funds, Cohen & Steers founders pull back, and a Waddell & Reed bond manager to retire.
American Century, the Kansas City-based investment firm, announced today that it would be removing the Livestrong name from its series of target-date funds, effective May 31, 2013. The name change comes on the heels of the admission of doping this past January by cyclist Lance Armstrong, who founded the Livestrong Foundation to promote cancer research. American Century has been associated with the Livestrong Foundation and has used its name on its target-date funds since 2006.
Going forward, American Century plans to group its target-date funds under the One Choice name, a brand already in use for the firm's target-risk funds. Although American Century is touting the name change as a move to simplify and consolidate its retirement offerings, it's unsurprising the firm is choosing to distance itself from the tainted Livestrong brand in the wake of Armstrong's highly publicized admission. American Century is not the first Kansas City-based organization to dissociate itself from the Livestrong brand. Earlier this year, the Sporting Kansas City professional soccer team, whose stadium was formerly known as Livestrong Stadium, terminated its contract with the Livestrong foundation and removed the name from the stadium.
Although this name change may take away a recognizable aspect of this target-date series' branding, it has no effect on the investment capabilities or merit of the funds. American Century's target-date funds receive a Bronze rating from Morningstar, and they've produced both strong performance and healthy asset growth. As of March 31, 2013, the Livestrong funds were the 10th-largest series of target-date mutual funds, with $7.6 billion in assets under management.
Manager Change at T. Rowe Price New Era
T. Rowe Price announced last week that Tim Parker, the manager of Neutral-rated T. Rowe Price New Era (PRNEX), is leaving the firm and will be replaced by Shawn Driscoll. Driscoll will transition into the role before taking full responsibility by Sept. 30, 2013, at the latest. The announcement is somewhat of a surprise, considering that Parker has managed the fund only since June 2010 and has generated decent results during that time. While Driscoll has been an analyst on the fund since 2006, this will be his first lead-manager assignment. He has managed a sliver of the firm's institutional, analyst-run U.S. Structured Research portfolio, though, which is similar to T. Rowe Price Capital Opportunity (PRCOX). As an analyst, Driscoll has covered many of the major natural resources subsectors including coal, exploration and production, mining equipment, metals, agriculture, engineering and construction, and industrial gas companies. The transition will be used to get him up to speed on those subsectors with which he's less familiar, including oil majors, energy services, and refiners.
The fund will likely become even more growth-oriented and opportunistic than it had been under Parker. During the past three years, Parker has turned the fund into more of a pure natural-resources offering than it had been under prior manager Charles Ober, cutting back on the less-commodity-sensitive oil majors for greater exposure to exploration and production and industrial-materials companies. He has also been more willing to trade around positions than Ober was, increasing annual turnover to roughly one third from the teens. Driscoll will likely push further in that direction, as he doubts that commodity prices will offer the same tailwind that they had in the 2000s, which makes it even more important to be valuation-sensitive and to take profits as they come. He predicts that turnover will increase to 50% or so, which is still below the 77% category average. Driscoll also plans to be more growth-oriented than Parker, looking for companies that are growing revenues rather than those that look cheap relative to their reserves.
Although none of this amounts to a radical strategic overhaul, any manager change creates unknowns. Those are perhaps exacerbated in this case given that Driscoll doesn't have a track record of his own.
DWS Drops Quant Subadvisor QS Investors
DWS is terminating subadvisor QS Investors and bringing a number of funds under in-house management, starting in May 2013. QS Investors served as in-house quantitative group in Deutsche Bank's asset-management arm and was spun-out as an independent entity in 2010. The firm currently subadvises 16 DWS mutual funds.
This change fits a larger trend. After DWS' parent, Deutsche Bank, opted not to sell the asset manager in 2012, DWS has embarked on a growth plan that includes reshuffling internal investment staff. Along the way, the firm has been cutting ties with some subadvisors. In January 2013, DWS fired subadvisor (and former DWS manager) Oliver Kratz and his firm Global Thematic Partners from DWS Global Growth (SGQAX).
In May 2013, DWS Core Equity (SUWAX) will be handed over to quant manager Owen Fitzpatrick, who currently runs DWS Capital Growth (SDGAX). In addition, Joseph Axtell will take the reins of DWS Small Cap Core (SZCAX). Axtell currently manages four other offerings, including DWS Small Cap Growth (SSDAX).
In July 2013, DWS will take over management responsibility of the five LifeCompass target-retirement funds. An internal DWS team will manage the fund's glide paths, using inputs from consultant Hewitt EnnisKnupp. The firm will also hand the reins of DWS Diversified International Equity (DBISX) to managers Nils Ernst, Martin Berberich, and Sebastian Werner.
Finally, DWS will swap managers at Neutral-rated DWS Disciplined Market Neutral . Starting in July 2013, the fund will be comanaged by subadvisors Pyramis Global Advisors and Henderson Alternative Investment Advisor Ltd., and incorporate a new long/short approach managed by Owen Fitzpatrick.
Matthews Announces New Funds and New Roles on 2 Other Funds
Matthews announced the launch of two new funds this week: Matthews Asia Focus Fund (MAFSX) and Matthews Emerging Asia Fund (MEASX). Matthews Asia Focus will employ a growth-oriented approach to stock selection and will normally invest in 25 to 35 names. Kenneth Lowe will serve as the lead manager of the fund, while Sharat Shroff and Michael Oh will serve as comanagers. Lowe current serves as a comanager on Silver-rated Matthews Asian Growth & Income (MACSX); Shroff currently serves as the lead manager of Silver-rated Matthews India (MINDX), co-lead manager of Gold–rated Matthews Pacific Tiger (MAPTX), and comanager of Silver-rated Matthews Asia Growth (MPACX); and Oh current serves the as lead manager of Matthews Korea and Matthews Asia Science & Technology (MATFX).
Matthews Emerging Asia Focus will employ a growth-oriented approach to stock selection and will normally invest a substantial portion of its assets in companies based in Asia's smaller but faster-growing markets in Asia such as Cambodia, the Philippines, and Sri Lanka. It will also invest in firms based in the region's larger markets (except Japan). Taizo Ishida will serve as the lead manager of the fund, while Robert Harvey will serve as the comanager. Ishida currently serves as the lead manager of Bronze-rated Matthews Japan (MJFOX) and Silver-rated Matthews Asia Growth (MPACX). Harvey, who joined the firm in 2012, has significant emerging-markets experience, including three years as a portfolio manager in Vietnam.
Matthews also announced partial manager changes at two other funds in its lineup. Kenichi Amaki has replaced Michael Han as the comanager on Bronze-rated Matthews Asia Small Companies (MSMLX). Lydia So remains the lead manager on that fund. Amaki continues to serve as a comanager on Matthews Japan while Han remains a comanager on Matthews Korea. In addition, Jesper Madsen and Yu Zhang have switched roles on Bronze-rated Matthews China Dividend (MCDFX). Zhang is now the lead manager and Madsen is now the comanager. Madsen remains the lead manager and Zhang the comanager on Gold-rated Matthews Asia Dividend (MAPIX).
Changes at Cohen & Steers
Cohen & Steers announced that Marty Cohen and Bob Steers are stepping down from their comanager roles on all the firm's funds. Investors should not be too concerned, as the founders have ceded much of the day-to-day role in the funds to the existing management team. The duo aren't retiring, though, and remain engaged in running the firm. Cohen & Steers also recently scooped up a four-member commodities team from GE Asset Management. That team recently took over a sleeve of Cohen & Steers Real Assets (RAPAX). In addition, Jason Yablon, a comanager on Cohen & Steers Emerging Markets Real Estate and several of the firm's closed-end funds, was added to the team at Bronze-rated Cohen & Steers Realty Shares (CSRSX).
Waddell & Reed Global Bond Manager to Retire
According to a filing from Ivy Funds, portfolio manager Daniel Vrabac will be retiring from the firm, effective June 1, 2013. Vrabac, 58, serves as comanager on Ivy Global Bond (IVSAX) and sibling fund Waddell & Reed Global Bond . Comanager Mark Beischel, who also serves as the firm's global director of fixed income, will remain as the funds' sole manager.
Senior fund analysts Josh Charlson, Kevin McDevitt, and William Samuel Rocco and fund analysts Robert Goldsborough, Flynn Murphy, Kathryn Spica, and Rob Wherry contributed to this report.
