Bronze-Rated Fidelity Bond Fund Gains New Lead Manager

On Wednesday, Fidelity announced a manager shuffling at Bronze-rated  Fidelity Intermediate Bond Fund (FTHRX). As part of the change, Robin Foley joined the fund as lead manager, replacing Ford O'Neil. Rob Galusza, who has headed up the fund as lead manager since 2009, will remain on the portfolio as a comanager.

While manager switches can spell trouble, this one is unlikely to mean major changes for shareholders. For starters, Fidelity employs a truly team-based approach in running its fixed-income portfolios, which minimizes the impact of individual departures. Moreover, Foley, a 27-year Fidelity veteran, brings two decades of experience managing short- and intermediate-term bond portfolios at the firm. She and Galusza have a long history of working together and currently serve as comanagers of the similarly run and Bronze-rated  Fidelity Short-Term Bond (FSHBX). Finally, O'Neil remains with the firm as manager of Gold-rated  Fidelity Total Bond (FTBFX) and will continue to work closely with Foley and Galusza.

More significant changes are underway at Fidelity Advisor Intermediate-Term Bond. As of Wednesday, the fund was renamed Fidelity Advisor Limited Term Bond (EFIPX) and repositioned as a short-term, corporate-focused bond portfolio. As part of the change, O'Neil is also stepping down from his role of comanager of the fund. He will be replaced by David Prothro. Galusza remains as lead manager on the portfolio.

Revised Expense Ratio for FMI Focus
As reported in last week's edition of Fund Times, Broadview Advisors, the longtime subadvisor to Silver-rated  FMI Focus (FMIOX), will be bringing the mutual fund in-house. Since last week's report, an amended proxy has been filed to correct an error in the calculation of the expense ratio in the original proxy. The revised estimate reports an expected expense ratio of 1.21% for the to-be-formed Broadview Opportunity Fund. While higher than the originally reported estimate of 1.12%, fund shareholders and prospective investors still should experience a slight reduction from the current 1.26% expense ratio as a result of the transition.

American Century Launches Emerging-Markets Value Fund
On Thursday, American Century rolled out a new value-oriented emerging-markets fund that is managed by the firm's quantitative equity team in Mountain View, Calif.

Available in investor, institutional, A, C, and R share classes, American Century Emerging Markets Value Fund is managed by Vinod Chandrashekaran, who is American Century's director of quantitative research, Yulin Long, and Elizabeth Xie. The trio also manages two other very small funds: American Century International Value (MEQAX) and American Century International Core Equity .

The new fund's managers use a two-step process to pick stocks that they believe are undervalued. First, they use quantitative models to rank the stocks of companies based in emerging-markets countries, with an eye toward selecting firms whose characteristics are similar to those in the MSCI Emerging Markets Value Index. Then, they employ portfolio optimization techniques to help construct a portfolio of companies offering an optimal balance between risk and expected return, with the expectation that the portfolio they build can provide better returns than the MSCI benchmark without taking on much extra risk.

Firm officials touted the new fund as an unusual entrant in the market, given that most emerging-markets funds follow either a growth or core strategy. That said, the emerging-markets value category has several large players. On the open-end side, there's the $19 billion DFA Emerging Markets Value (DFEVX) and two very small funds: AllianzGI NFJ Emerging Markets Value (AZMAX) and SA Emerging Markets Value (SAEMX). On the exchange-traded fund side, there are several emerging-markets funds with value tilts: WisdomTree Emerging Markets Dividend Growth (DGRE), iShares MSCI Emerging Markets Value , iShares Emerging Markets Dividend (DVYE),  SPDR S&P Emerging Markets Dividend (EDIV),  WisdomTree Emerging Markets Equity (DEM),  WisdomTree Emerging Markets SmallCap Dividend (DGS), and EGShares Emerging Markets Dividend Growth ETF .

PIMCO Hires Maisonneuve From Schroders
On Wednesday, PIMCO announced the hiring of Virginie Maisonneuve as managing director, global head of equities, and portfolio manager.

Maisonneuve, who is expected to begin work at PIMCO in January, most recently had been head of global and international equities at Schroders. She will be based in London and will lead PIMCO's active equity management. According to a release, Maisonneuve also will develop and introduce new equity and asset-allocation strategies.

In that same release, PIMCO CEO and co-CIO Mohamed A. El-Erian cited Maisonneuve's "25-year career as a portfolio manager and a business builder" and called her "a proven equity investor and leader."

Transamerica to Liquidate 2 International Funds
On Oct. 25, Transamerica announced that effective Dec. 15, the firm will liquidate two international funds that have never gained much traction with investors.

Set to be liquidated in mid-December is the $134 million Transamerica International Bond , which is subadvised by J.P. Morgan. Also headed for liquidation is the $273 million Transamerica International Value Opportunities Fund, a stock fund that is subadvised by Thornburg and that has been used as a building block for Transamerica funds of funds.

 

New Managers for Large SunAmerica Dividend Fund
On Oct. 18, the longtime manager of a large SunAmerica dividend fund stepped aside.

Brendan Voege had been at the helm of the $7 billion SunAmerica Focused Dividend Strategy (FDSAX) for more than seven years until stepping down two weeks ago and leaving the firm. Replacing him as named portfolio managers were SunAmerica's chief investment officer Timothy Pettee and comanagers Timothy Campion and Andrew Sheridan.

Of late, assets have streamed into the fund, which has followed a rules-based strategy since Voege took over in 2006. Voege opted for a once-a-year portfolio selection process in which he would hold the Dow Jones Industrial Average's 10 highest-yielding stocks, which also are known as the Dogs of the Dow, along with another 20 names from the Russell 1000 Value Index, based on certain characteristics like dividends and profitability.

Ariel Investments Renames Global, International Funds
On Sept. 30, Ariel Investments renamed two small funds that up to now have largely held global and international stocks.

With the name change, Ariel International Equity Fund became known as Ariel International Fund (AINIX) and Ariel Global Equity Fund became known as Ariel Global Fund (AGLYX). Both funds, which began trading at the end of 2011, are managed by Rupal Bhansali, who joined Ariel that same year.

As part of the name changes, Bhansali now has more flexibility and is no longer required to invest at least 80% of net assets in equity securities. However, other aspects of the funds' investment strategies will remain the same, with the international fund continuing to invest primarily in common stock issued by companies in developed foreign markets and the global fund continuing to invest primarily in global equities issued in both developed and emerging markets.

An Ariel spokeswoman said that the name change was spurred by the fact that the firm is an all-equity shop. "We thought 'equity' in the title was unnecessary," she told Morningstar.  She reiterated that the firm does not anticipate any changes in how the fund is managed.

J.P. Morgan Plans to Cut Funds, Develop Actively Managed ETFs
In a recent interview in the Financial Times, George Gatch, who is the chief executive of J.P. Morgan Asset Management's global funds business, said the firm is evaluating its more than 650 retail mutual funds around the world and could prune that number by as much as 15%.

That news gained widespread attention, as it suggested that as many as 100 J.P. Morgan Asset Management funds globally could be headed for the dustbin.

However, a closer look at the firm's efforts and interviews with J.P. Morgan representatives indicate that it's likely that investors in the United States scarcely will notice any changes.

The reasons are twofold. First, J.P. Morgan Asset Management's fund complex in the U.S. is smaller and newer than in some other regions. And second, the firm's fund portfolio already has been rationalized some in recent years. For those two reasons, firm officials have said that the number of funds pruned in the U.S. is expected to be smaller than in other regions.

Overseas, however, more cuts are expected. The article noted that as many as 49 of the 280 funds that J.P. Morgan Asset Management issues in Europe already have been flagged to either be merged or liquidated. And firm officials have told Morningstar that they already have culled 42 funds in Europe and the United Kingdom. Further fund rationalizations are expected in Asia and the U.S., they said, with recommendations on funds to be eliminated anticipated within the next six to nine months.

Separately, the Financial Times article noted that J.P. Morgan Asset Management has a plan to employ active strategies within exchange-traded funds. In the article, Gatch declined to provide any details of that plan. However, the firm on Oct. 21 filed for SEC permission to create a passively managed ETF that would be the first-ever proposed ETF that J.P. Morgan Asset Management would register under the Investment Company Act of 1940. The proposed JPMorgan Global Equity ETF would track an unspecified index and would hold stocks that were chosen based on a multifactor investment selection process that takes into account relative valuation, price momentum, volatility, and market caps. Stocks would be chosen from across global regions and industries.

And although that proposed ETF would be a passively managed fund, in subsequent interviews, J.P. Morgan Asset Management officials have made clear that the firm's future plans are for a mainly actively managed lineup of ETFs. Bob Deutsch, a 30-year J.P. Morgan veteran who formerly was the head of global liquidity, is heading up that effort.

Senior fund analysts Sarah Bush and Michelle Canavan Ward and fund analysts Robert Goldsborough and Flynn Murphy contributed to this report.