Fund Times: News on iShares, AIM, Buffalo and More
Our weekly roundup of news relevant to mutual fund investors.
IShares Move to NYSE
Barclays Global Investors announced on July 20, 2005, that the firm is moving 61 of its iShares exchange-traded funds from the American Stock Exchange to the New York Stock Exchange. An additional 19 iShares ETFs will be transferred to the Archipelago Exchange, which is poised to become part of the NYSE. These ETFs will move in several phases, starting later this year and concluding in 2007. Individual retail investors will likely notice little difference. BGI states that the move is being driven in part by Archipelago and NYSE's improved technology, which it claims will help facilitate the growing iShares lineup.
AIM Execs Settle Charges
Dow Jones Newswires reported that former AIM executives will pay $225,000 to settle charges of authorizing market-timing arrangements between January 2001 and September 2003. Former AIM Distributors chief executive Michael Cemo and the former chief investment officer of AIM Advisors, Ed Larsen, will split the fine and agreed not to work in the mutual industry for nine months and six months, respectively. According to the complaint, Cemo and Larsen allowed some investors multiple trades in and out of various mutual funds, even though AIM's fund prospectuses limit investors to 10 such trades per year.
Fund of ETFs
New York-based J&W Seligman & Co. is joining the target-retirement crowd by releasing three new funds of exchange-traded funds: TargETFund 2015, TargETFund 2025, and TargETFund Harvester. The TargETFund funds will utilize an all-cap "go anywhere" approach and will follow a "migration" strategy (similar to other target-retirement funds), which will gradually shift assets to more conservative assets as the target year nears. TargETFund Harvester will focus on mid- and large-cap domestic and international companies, REITs, and fixed-income securities. The fund's managers will be Charles Kadlec and John Cunningham, who currently manage various Seligman funds that have inconsistent records at best. The expense ratio of the funds will be 0.44%, not including the costs of the underlying ETFs. This compares unfavorably with traditional target retirement funds, such as those from Fidelity or T. Rowe Price, which do not charge management fees on top of those of the underlying funds.
John Angrist, whom Kornitzer Capital Management (advisor to Buffalo Funds) recruited in early 2004 to comanage Buffalo Micro Cap (BUFOX), has left to start his own hedge fund. Angrist wasn't a senior member of Kornitzer's team, but his departure is a setback for the recently launched Buffalo Micro Cap. Angrist, who formerly worked for a private equity firm in New York, was responsible for several good stock picks, mostly from the Internet-commerce industry--an area previously ignored by Buffalo.
On July 18, 2005, Amerindo's board of directors approved merging Amerindo Technology (ATCHX) into Munder Internet (MNNAX). We applaud this move and think it's best for shareholders. Following the imprisonment of Amerindo's former managers, Alberto Vilar and Gary Tanaka, the fund experienced significant outflows (50% of assets, in fact). And under terms of the previous agreement, Amerindo farmed out subadvisor responsibilities to Munder, which were expected to result in fees between 5% and 7%. This new solution is preferable because Munder retains management responsibilities and fees will be 2.47%.
Last week we reported that Paul Marrkand would leave Putnam Investment Management. Now Bloomberg Business News reports that Marrkand will join Wellington Asset Management in August. Wellington is twice as large as Putnam, with $470 billion in assets, to Putnam's $195 billion.
Dieter Bardy does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.