2 Yacktman Funds to Slow Inflows

Yacktman (YACKX) and  Yacktman Focused (YAFFX), which have Morningstar Analyst Ratings of Gold and Silver, respectively, will close to new investors after Dec. 30, 2013, according to a filing on Monday from the fund's advisor, Managers AMG Funds. Existing shareholders may continue to buy shares in both funds. Additionally, the minimum initial investment in Yacktman Focused's institutional share class has been lowered to $100,000 from $1 million.

The decision to close the funds follows five years of tremendous asset growth. Yacktman's asset base was about $300 million five years ago and Yacktman Focused's was well below $100 million. Now the two funds have $25 billion in combined assets and nearly $30 billion firmwide. The funds benefited from strong equity markets since then, as well as robust inflows following excellent relative performance in 2008 and 2009, and again in 2011. Over the past five years, Yacktman has collected an estimated $9.2 billion and Focused has absorbed $8.5 billion.

Inflows have remained fairly strong even as performance has slowed the past two years. Both funds are on pace for their second consecutive bottom-quartile calendar-year finishes relative to large-blend peers. Returns have lagged as both funds have built 20% cash stakes, which helped limit losses during the 2007-09 credit crisis. With equity valuations at lofty levels, the team has had a difficult time finding new bargains.

Gross Stepping in as Manager on PIMCO Unconstrained Bond Fund
On Thursday, PIMCO announced that the firm's founder and co-chief investment officer, Bill Gross, will take over as the named portfolio manager on the $28 billion, Bronze-rated  PIMCO Unconstrained Bond (PUBAX).

The fund's manager since its 2008 inception, PIMCO veteran Chris Dialynas, has announced that he is taking a sabbatical beginning in the second quarter of 2014, and the management change has been made in preparation of Dialynas' absence. PIMCO did not specify how long of a leave that Dialynas, 59, will take.

We do not expect any changes to this fund, particularly as Gross already has been a member of PIMCO's unconstrained strategy management team, along with Dialynas and three others at the firm. Each of those five team members already runs unconstrained portfolios shaped by the group.

Husain to Take Over T. Rowe Price International Bond
Arif Husain will replace Ian Kelson at Neutral-rated  T. Rowe Price International Bond (RPIBX) on Jan. 1, 2014. Kelson, who's run the $4.9 billion fund since 2001, started stepping back from his responsibilities earlier this year when Husain was hired to replace him as head of international fixed income. Kelson isn't completely retiring, though. He'll remain a member of the firm's asset-allocation committee and will continue working with analysts. Husain, a hire from AllianceBernstein, has worked closely with Kelson since joining the firm in August. Chris Rothery, who joined T. Rowe Price in 1994, remains a comanager on the fund.

ING Funds to Get Voya Moniker in 2014
ING U.S. (VOYA), which went public as Voya Financial in May 2013 as part of its split from Dutch parent  ING Group (ING), announced in prospectus amendments earlier this week that it will be proceeding with the expected rebranding of its mutual fund lineup. There will be some differentiation between funds managed internally by ING and those run by external subadvisors. Internally run funds will be part of the Voya family, while third-party funds will use the abbreviation "VY." For the funds on its retirement platform, ING uses an extensive network of external subadvisors  including T. Rowe Price, PIMCO, and Oppenheimer.

 

Goldman Sachs Rolls Out Its First-Ever Closed-End Fund
Goldman Sachs launched its first closed-end fund last week, raising nearly $800 million in assets. Goldman Sachs MLP Income Opportunities is the biggest IPO since June and the fifth master limited partnership-focused fund launched this year. Brand recognition and interest in MLPs no doubt played integral roles in the successful launch. In a yield-hungry world, investors have flocked to these high-distributing funds in droves, even at premium IPO prices. GMZ is no different--the fund's premium rose from 4.9% at its launch to 5.2% at the close of the market on Wednesday. Despite a rocky year, MLPs have been a hot sector since the 2008 market crash. The typical fund is up 23% over the trailing five years on a net asset value basis and up 25% on a share price basis.

Manager Change at Principal Real Estate Securities
On Nov. 22, one of three managers of $1.3 billion Principal Real Estate Securities (PRRAX) stepped off the fund and was replaced by a new portfolio manager.

Matt Richmond, who had been a comanager of the fund since September 2010, also left the firm. He was replaced on the fund by Keith Bokota, who is a longtime member of Principal Real Estate Investors, which is Principal Global Investors' dedicated real estate group. Bokota joined the firm in 2007 as an analyst and currently is an associate director of real estate securities portfolio management. Kelly Rush and Anthony Kenkel continue as the fund's other two managers.

Goldman Sachs to Convert Closed-End Interval Fund Into an Open-End Fund
Goldman Sachs is planning to convert a closed-end interval fund that is devoted to corporate debt into an open-end fund.

The firm has planned a special meeting for Jan. 22, 2014, to seek shareholder approval to make the change to the Goldman Sachs Credit Strategies Fund, which has a reported $450 million in assets and currently provides limited liquidity on a quarterly basis. Assuming Goldman wins shareholder approval, the fund will be renamed the Goldman Sachs Long Short Credit Strategies Fund.

The move is aimed at allowing investors in the existing fund to gain increased liquidity in the form of redemption rights on any business day. Goldman launched the closed-end interval fund in 2009, targeting investing in different corporate credit asset classes. The fund has followed an unconstrained strategy, allowing its managers to invest in whichever areas of corporate credit have looked the most attractive, whether investment-grade debt, high-yield bonds, convertible debt, or bank loans.

Clearly, Goldman has been dissatisfied with the fund's structure, which continuously offers shares and requires a minimum investment of $25,000. The fund restricts investors' abilities to redeem shares in order to limit the forced sale of securities and preserve investors' returns. As a result, investors currently have access to liquidity only through quarterly offers to shareholders to redeem between 5% and 25% of the fund's outstanding shares at net asset value.

Hedged credit strategies have attracted significant assets of late, and now, Goldman is planning to remake the fund as a liquid-alternatives bond fund. The proposed open-end fund would take long and short positions in both corporate and government debt, including both fixed- and floating-rate securities and both investment-grade and junk debt.

Manager Change at American Funds Income Fund of America
Recently, there was a minor manager change on the Silver-rated moderate-allocation fund  American Funds Income Fund of America (AMECX).

The $87 billion fund follows American Funds' trademark multimanager approach and has no fewer than nine named managers. Recently, equity manager Grant Cambridge stepped off the fund after exactly 10 years and transitioned to another role at the firm. His replacement is longtime Capital Group fixed-income portfolio manager David Daigle, who has been with Capital since 1994.

We consider this change to be a very small and not one that would alter our opinion of the fund. The fund's other eight managers are long-tenured, with an average of roughly 24 years of history at the firm and about 14 years of experience managing assets for this fund. That's more than twice the average manager tenure at the typical moderate-allocation fund.

Fund of funds strategist Josh Charlson, senior fund analysts Cara Esser, Kevin McDevitt, Katie Reichart, and Kathryn Spica, and fund analysts Robert Goldsborough, Alec Lucas, and Flynn Murphy contributed to this report.