Leuthold to Merge Asset Allocation Fund Into Core Fund
The manager of Leuthold Asset Allocation, which has been reeling from outflows, has left the firm, prompting the merger. Also, AllianceBernstein changes named managers in its target-date series and target-risk suite, ING swaps out managers on its asset-allocation team supporting multiasset funds, and American Funds is set to launch an emerging-markets fund.
The lead manager of Neutral-rated Leuthold Asset Allocation , Eric Weigel, has left the firm. The fund will be merged into Bronze-rated flagship offering Leuthold Core Investment(LCORX). Weigel was just installed as lead manager in December 2012, and he had put a new strategy in place there to further differentiate the fund from Core Investment; the two had previously used the same asset allocation approach but constructed their equity portfolios differently. However, the firm found that investors in Asset Allocation wanted it to more closely resemble Core (which had been closed to all new investments when Asset Allocation was launched in 2006). As both funds have shrunk substantially in size recently due to outflows amid weak performance, the firm decided to merge the two. The merger is expected to take place by the end of October.
AllianceBernstein Swaps Out Managers of Target-Date Series, Target-Risk Suite AllianceBernstein(AB) has restructured its multiasset investment team, leading to changes in the named managers of its target-date series, AllianceBernstein Retirement Strategies, as well as its target-risk suite, AllianceBernstein Wealth Strategies. The target-date series has one of the worst long-term records among peers and has a Morningstar Analyst Rating of Negative.
The firm has created an investment unit dedicated to strategies that invest in multiple asset classes. The new Multi-Asset Solutions investment unit is led by Dan Loewy and Vadim Zlotnikov, two AllianceBernstein veterans who also have been named managers to the firm's target-date and target-risk series. All told, the team will oversee $90 billion of multiasset investments. Loewy has helped lead asset-allocation strategies, including the Dynamic Asset Allocation strategies, over his 17 years at the firm. Zlotnikov's specialty is equity and capital-markets research. He also runs a factor-based trading strategy for the firm and is well-known to the firm's sell-side clients.
Leaving the series is Seth Masters, former CIO of Defined Contribution and a manager of the series since 2005; he'll be exclusively working in AllianceBernstein's private client business. Dokyoung Lee, a manager since 2008, is leaving the firm. Remaining on the series are Christopher Nikolich, a manager since 2005, and Patrick Rudden, named since 2009. Both Nikolich and Rudden now report to Zlotnikov.
Manager Change on ING Asset-Allocation Team Supporting Multi-Asset Funds ING(ING) has made a change to the asset-allocation management team supporting its multiasset funds, including the Neutral-rated ING Solution target-date funds. Heather Hackett, a named portfolio manager on the target-date funds since 2009, is being removed from the portfolio management team, though she remains at ING as part of the multiasset group, focusing her efforts on the fixed-income side of asset-allocation research.
Replacing Hackett is Frank Van Etten, Deputy Head of ING's Multi-Asset Strategies and Solutions group. Van Etten has been with ING since 2002, working in the parent company's headquarters in the Hague since 2002 and located in New York since 2010.
This change is the latest tweak to the asset-allocation team, following a more significant move in August 2012, when Halvard Kvaale joined the group as the new head of manager research. Paul Zemsky remains the head of the group.
American Funds to Launch Emerging-Markets Offering Capital Group's American Funds have filed to launch a new emerging-markets stock fund. The American Funds Developing World Growth and Income Fund will invest primarily in emerging-markets companies or firms that drive significant portions of their revenue from emerging-markets consumers. The filing suggest the new offering will be a more intrepid and purer play on developing-markets equities than the firm's Gold-rated American Funds New World(NEWFX), which splits its portfolio between emerging- and developed-markets stocks, and emerging-markets debt. Compared with other diversified emerging-markets funds, New World has only a 43% emerging-markets allocation versus the typical competitor's 72% stake. Developing World Growth and Income's mandate, in contrast, calls for a minimum 80% allocation to companies based in or with significant ties to developing countries. A team of comanagers will run sleeves of the new fund, which is common practice at American Funds offerings.
Emerging-markets funds continue to attract investor interest. Despite uninspiring returns recently, diversified emerging-markets funds have drawn inflows of more than $88 billion during the three years through July 2013, according to Morningstar data.
This fund launch fits a broader effort at Capital Group to reinvigorate its business and bring new funds to market. The American Funds--with roughly $1 trillion in assets--have suffered more than $260 billion in mutual fund outflows during the four years through July 2013, according to Morningstar data. Earlier this year, Capital Group announced a series of changes designed to streamline the organization and improve performance, including combining its institutional and mutual fund investment arms. The firm has also been working to launch new strategies. In late 2012, Capital Group seeded three fixed-income funds--a corporate-bond fund, global high-yield fund, and an inflation-linked bond fund--though they are not yet open to public investors as of September 2013.
Historically, Capital Group has opened funds at a moderate pace while avoiding overly trendy launches. From 2000 to 2012, the firm launched five American Funds offerings, in addition to a target-retirement series, target-date 529 college savings fund, and a series of static funds of funds.
Fidelity Adds Comanagers to Select Energy, Leisure Funds Fidelity recently has added comanagers to two of its actively managed U.S. equity sector funds.
On Aug. 23, Ben Shuleva joined the management of Fidelity Select Energy Service as a comanager along longtime skipper Jonathan Kasen. Shuleva has been with Fidelity's equity division since 2008, when he signed on as a research associate covering the energy sector. Shuleva later added exploration and production companies to his coverage and was promoted to be a research analyst in 2011. Since that time, he has covered the refining space and the offshore rig sector.
Meanwhile, on Aug. 16, Katherine Shaw came aboard as a comanager of Fidelity Select Leisure(FDLSX), alongside longtime manager Jean Park. Shaw has been with Fidelity since signing on as an equity research intern in 2007. She became a research analyst in 2008, covering restaurant stocks. Also on Aug. 16, Park added another fund to her purview, picking up management of the $1.8 billion Fidelity Growth Strategies(FDEGX). Park succeeded Christopher T. Lee, who will continue to manage Fidelity Select Financials (FIDSX) and Fidelity Select Brokerage and Investment Management Portfolio (FSLBX).
Brown Capital Management Small Company Adds Manager The portfolio management team at Brown Capital Management Small Company(BCSIX) recently expanded its ranks with the official addition of Damien Davis to the manager roster. Davis got his start in the investment industry with his initial 2003-08 stint at Brown Capital. After leaving the firm to attend business school, he rejoined as a research analyst of the small-cap team in 2010. In the ensuing years, Davis has been assuming additional portfolio manager duties on the small-growth strategy's separate account vehicles.
Davis' appointment brings Small Company's management team member count to five, and long-term manager Keith Lee continues to lead the firm's small-cap investing efforts. With Davis' seven years of investment experience in the mix, the highly stable and veteran team now averages 15 years of tenure at Brown Capital and 25 years in the industry; portfolio manager Robert Hall's five decades of investment experience handily boost those figures, as does Lee's almost 30 years in the industry.
Director of fund of funds research Laura Lutton, fund of funds strategist Josh Charlson, senior fund analysts Greg Carlson and Janet Yang, and fund analysts Robert Goldsborough and Flynn Murphy contributed to this report.
Morningstar Fund Analysts does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s