Fund Times: Merger Fund to Reopen
Plus, new American Beacon fund, news from Brandywine, and more.
Merger Fund (MERFX) is reopening to new investors on Jan. 25, 2006, after being closed for almost two years. This merger arbitrage fund's assets are below the level they were when the fund first closed. Assets are currently down to $1.25 billion, from a high of $1.88 billion. Thus, the managers feel that they have sufficient capacity to further grow the fund. And moreover, they expect to see deal-making expand in the year ahead as companies that have enjoyed strong earnings start to use some of their cash to make acquisitions. In the quarterly letter, Frederick Green, president of the fund, states, "arbitrage spreads have become more favorable, even for 'plain-vanilla' transactions. Another positive development for our business is the increasing frequency of strategic overbids, in which corporate buyers aggressively target companies that have already agreed to be acquired by other firms. Such situations can result in 'windfall' profits for arbs." The fund is one of the few market neutral funds that has actually delivered fairly dependable returns in the high single digits.
New American Beacon Small Value Fund
American Beacon Advisors, Inc. is launching a new fund, Small Cap Value Opportunity Fund. The only subadvisor listed at this time is PanAgora Asset Management. PanAgora's team consists of Brian Bruce, Richard Wilk, John Griffin, and George Mussalli. PanAgora (a company owned by Putnam Investments and minority owned by Nippon Life Insurance) currently subadvises two other funds in our database, Preferred Asset Allocation (PFAAX) and Quant Emerging Markets (QEMAX). While the track records for these two funds are inconsistent, neither is run with a small-cap value focus.
Friess Associates See Bright 2006
Bill D'Alonzo, CEO of Friess Associates and manager of Brandywine Fund (BRWIX) sees favorable economic conditions going into 2006--inflation, interest rates, and unemployment remain low, and most companies continue to see healthy earnings growth. In the firm's annual report, he notes that they are still fans of Target (TGT). They like the company for its price-sensitive but design-oriented style, which appeals to consumers and differentiates itself from its number one rival, Wal-Mart (WMT). To read more on this and other stocks in the funds, click here.
Thornburg Value and International Value Get More Help
Bill Fries now has two comanagers on his two funds. Santa Fe-based Thornburg Investment Management appointed to the funds four new comanagers effective Feb. 1, 2006. Ed Maran and Connor Browne were added to Thornburg Value (TVAFX) and Institutional Domestic Equity Strategy with Bill Fries. Wendy Trevisani and Lei Wang were appointed as comanagers to Thornburg International Value (TGVAX) and Institutional International Equity Strategy also joining Bill Fries. None of the new managers has a prior track record managing public mutual funds.
AIM Needs Back-Office Help
For the second time in as many weeks, AIM Capital Management released SEC documents that seem to indicate that they could use a better proofreader. This week they amended a previous Proxy Statement and Prospectus related to the reorganization of AIM Premier Equity (AVLFX) into AIM Charter (CHTRX) that contained incorrect performance numbers. And last week they released a document related to several fund mergers that contained the header "THIS DOCUMENT IS FOR INTERNAL TRAINING USE ONLY."
A Dallas Index?
What a great idea: an index devoted to just one city. As reported in indexuniverse.com, the Greater Dallas Chamber is working with NASDAQ on an index that would track the technology sector of the greater Dallas area. If it gets off the ground, the index would have 41 companies representing $250 billion in market capitalization, with companies from large-cap semiconductor companies like Texas Instruments (TXN) to smaller players like Digital Recorders (TBUS).
Dieter Bardy does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.