Fund Times: Lance Armstrong Talks Investing
Plus, news on American Funds, DWS, and more.
In a press release Thursday, Kansas City-based American Century announced that it's collaborating with Lance Armstrong as a new spokesman to help educate investors about their financial future. The campaign is titled "Put Your Lance Face On" and serves to prepare investors for a secure financial future.
The firm will be rolling out in May four life-cycle funds dubbed the "Livestrong Portfolios." The funds, which will have target dates of 2015, 2025, 2035, and 2045, are designed for folks retiring on or near those dates. Of course, these are just the latest entrants into what's becoming a crowded field of target-retirement offerings. There are now so many on the market, in fact, that we're rolling out new categories for them.
The Armstrong-American Century connection has some roots. The firm's founder, Jim Stowers, and his family have long been big supporters of cancer research. Moreover, both he and Armstrong are cancer survivors. The Stowers Institute in Kansas City is intended to be a world-class research facility, and in their hopes, a world-wide center for cancer research. According to a press release, "In 1994, Mr. and Mrs. Stowers incorporated the Stowers Institute and created its supporting endowment with a gift of $50 million. In the years since, they have made additional gifts, which, together with growth through investment, have brought the value of the endowment to approximately $2 billion today."
California AG Returns to American Funds Fight
What looked like a dead issue may have some new life. Dow Jones Newswires reported Wednesday that the Golden State's top lawyer, Bill Lockyer, isn't taking a ruling that appeared to prevent him from pursing a case against American Funds Distributors lying down.
Last March, Lockyer's office sued the firm for allegedly failing to properly disclose that it had made payments to brokers in return for their sales of the funds. American immediately countersued, arguing that its revelations were adequate, and further that Lockyer didn't have the authority to bring the case. The matter appeared to be closed in November when Los Angeles Superior Court Judge Carl J. West said that he agreed with the firm.
But now the AG's office is contending that it does have the authority after all.
To date, there hasn't been much public evidence of wrongdoing, though Lockyer's original complaint included very serious allegations against the fund firm. We'll continue to update our readers as more information becomes available.
Thoughts on the Tech Sector
In a recent commentary posted on growth fund advisor Turner Investment Partners' Web site, Tara Hedlund, Chris McHugh, and Bob Turner posted commentary on tech stocks and what the sector has been through in recent years. They pointed to a new breed of tech leaders-- Apple Computer (AAPL), Broadcom (BRCM), Marvell Technology Group (MRVL), and Qualcomm (QCOM)--whose 30% annual earnings and revenue growth are driven largely by "the increasingly consumer-oriented nature of the tech sector."
Additionally, they see "six firms (that) could be the future growth kings." As noted, Broadcom and Marvell Technology Group, "as well as F5 Networks (FFIV), Red Hat (RHAT), Salesforce.com (CRM), and SiRF Technology Holdings (SIRF)." Read the growth advisor's point of view, and then make sure to read our own stock analysts' reports on these companies.
Deutsche/DWS Seeks Votes on Voting
In a Feb. 3, 2006, SEC filing, Scudder/Deutsche proposed merging closed-end fund DWS New Asia (SAF) into open-end option DWS Emerging Markets Equity (SEKAX). (Both were formerly Scudder funds.) Per the SEC filing, the "Emerging Markets Fund and New Asia Fund are similar, but have some important differences. Emerging Markets Fund has a larger investment universe that includes all emerging markets, whereas New Asia Fund focuses primarily on Asian issuers in both developed and emerging markets."
Or in other words, the strategies are not that similar after all.
What's equally alarming is that the fund failed to get earlier in 2005 the necessary two thirds of shareholder votes to approve the merger, and as of Feb. 3, they are seeking to change the rules to bypass a two thirds vote. According to the filing, "On Dec. 2, 2005, at New Asia Fund's annual shareholder meeting, approximately 63.97% of the New Asia Fund's outstanding shares were voted in favor of the proposed merger." But on Feb. 27, 2006, "(shareholders) are being asked to approve an amendment…to reduce from two thirds to a majority the required vote of the common stockholders necessary to approve certain types of mergers, consolidations or sales of all or substantially all of the assets of New Asia Fund."
Shareholders should note that Emerging Markets fundholders would be subject to a 2% redemption fee if shares are redeemed within 30 days following the merger.
And finally, as of Feb. 6, 2006, all former Scudder funds are known as DWS funds.
First New PowerShares ETF of the Month
Following the release of the PowerShares Zacks Micro Cap Portfolio (PZI) in August 2005, PowerShares is set to release on Feb. 16, 2006, another new Zacks ETF: the Zacks Small Cap Portfolio. Similar to its sibling, this ETF will try and match returns on the semiactive Zacks Small Cap Index, which is made up of about 250 U.S. stocks whose companies will change based on the ratings that Zacks' analysts assign to the underlying stocks. The stocks in the index have market capitalizations that range from about $205 million to $2.4 billion.
Now It's Open, Now It's Not
Analyst Pick Schneider Small Cap Value (SCMVX), which reopened to investors on January 17, has again closed to new investors. Schneider previously said that they would close the fund again when net assets reached $100 million, and it cleared that hurdle on February 8.
Dieter Bardy does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.