Third Avenue Manager Departs
Plus, Ameriprise wins fee battle, Franklin Templeton prevails in market-timing case, and more.
Jeff Gary, who helped launch Third Avenue Focused Credit (TFCIX) in August 2009 following a six-year stint managing BlackRock High Yield Bond (BHYAX), has left Third Avenue. Focused Credit's mandate is to invest in distressed securities, high-yield bonds, bank loans, and "busted" convertibles (bonds or preferred stocks whose stock prices are trading below their conversion value).
Comanager Tom LaPointe, who joined the firm with Gary and who was named to this offering in September 2010, will continue to run the fund. Third Avenue is planning for LaPointe to serve as the sole manager of the $1 billion fund. From its inception through Dec. 15, 2010, the fund has returned 16.1%, lagging the high-yield bond category's 19.1% gain.
Before he arrived at Third Avenue, LaPointe was at Columbia Management, where he comanaged several funds, including Columbia High Yield Opportunity (COLHX) and Columbia Intermediate Bond (LIBAX) from early 2003 through early 2009. Over that period, both funds edged the average returns for their respective categories. High Yield Opportunity posted a 3.0% annualized gain versus the average high-yield bond fund's 2.4% return, while Intermediate Bond returned 2.85% and the typical intermediate-term bond fund returned 2.1%.
The court's judgment in favor of Ameriprise is the first since the Supreme Court affirmed the Gartenberg standard in Jones v. Harris Associates L.P. earlier this year. In 1982, Gartenberg established that expense ratios are reasonable if they are within the range of what might be determined in an arms-length negotiation.
The plaintiffs plan to appeal the decision.
Franklin Templeton Prevails in Market-Timing Case
Late last week, Franklin Templeton won a legal battle in Maryland's U.S. District Court. The case was related to the 2003 market-timing scandals. Franklin was one of a number of fund companies named in class-action lawsuits and was the only firm that didn't settle, although Franklin did pay $50 million in 2004 to settle market-timing allegations with the Securities and Exchange Commission.
American Century Quant Team Changes
American Century recently announced a number of changes to its quantitative equity team.
American Century Income & Growth (BIGRX) and American Century Equity Market Neutral (ALHIX) are losing two comanagers. Zili Zhang, American Century's director of quantitative research, has left the firm, and Kurt Borgwardt is retiring. Zhang also has left American Century International Core (ACIMX). Brian Garbe and Claudia Musat now run Income & Growth and Market Neutral. Armando Lacayo and Elizabeth Xie remain as comanagers of International Core.
Joe Sterling, comanager of American Century Utilities (BULIX) and American Century Global Gold (BGEIX), also has departed. Bill Martin and Lynette Pang will run the funds. Martin has been a comanager on both funds. He's been at Global Gold since mid-1992.
According to an SEC filing, PIMCO Total Return (PTTDX) has expanded its mandate to allow the investment of as much as 10% of assets in equity-linked securities like convertibles and preferred stock. It won't invest in common stock.
American Beacon is launching American Beacon Small Cap Value II. It will be subadvised by teams from Dean Capital Management, LLC; Fox Asset Management, LLC; and Signia Capital Management. The Investor share class will have an expense ratio of 1.37%--thanks to fee waivers in place through March 2012--which is pricier than the 1.18% median for no-load small-cap funds.
Loomis Sayles has launched Loomis Sayles Absolute Strategies, a global absolute return-focused bond fund. It will be managed by Matthew Eagan; Kevin Kearns, senior derivatives strategist and absolute return portfolio manager; and Todd Vandam, senior credit strategist. Eagan is on the team running Loomis Sayles Bond (LSBDX), Loomis Sayles Strategic Income (NEFZX), and Loomis Sayles Investment Grade Bond (LIGRX), among others.
The board of trustees of Calamos Multi-Fund Blend (CMQAX) has approved the liquidation of the $16 million large-growth fund. The fund will close to new investors Dec. 15 and will be liquidated on or around Jan. 31, 2011.
Effective Dec.15, 2010, Dreyfus/The Boston Company Emerging Markets Core Equity (DBEAX) has been added as an underlying fund on Dreyfus Diversified International (DFPAX) to replace Dreyfus Emerging Markets Opportunity (SEOAX).
Effective Jan. 1, 2011, Jeffrey Partenheimer will no longer be a portfolio manager for Target Conservative Allocation (PCGAX), Target Moderate Allocation (PAMGX), Target Growth Allocation (PHGAX), and Target Large Capitalization Value (TALVX).
Effective Jan. 1, 2011, Paul McCulley will longer serve as portfolio manager for Target Intermediate-Term Bond (TAIBX). He will be replaced by Saumil Parikh.
The board of trustees of Alger International Opportunities (SPEIX) approved the liquidation of the fund. The fund's assets are expected to be distributed to investors Jan. 21, 2011.
On Dec. 14, 2010, the board of trustees of ALPS/GNI Long-Short (AGLSX) authorized the liquidation of the fund. The liquidation is expected to take place on or before Dec. 31, 2010.
Shigeru Hirabayashi and Tomoyuki Takahashi are no longer portfolio managers for Nomura Partners The Japan (NPJAX), Nomura Partners Asia Pacific Ex Japan (NPAAX), Nomura Partners India (NPIAX), Nomura Partners Greater China (NPCAX), Nomura Partners Global Equity Income (NPWAX), Nomura Partners Global Emerging Markets (NPEAX), Nomura Partners Global Alpha Equity (NPGAX), Nomura Partners International Growth Equity (NPLAX), and Nomura Partners International Equity (NPQAX).
Effective Dec. 15, 2010, Eric Meyer joined the management team of DWS Enhanced Commodity Strategy (SKNRX).
The board of trustees of SEI Asset Allocation approved the mergers of SAAT Diversified Conservative Income (SACNX) into SAAT Conservative Strategy (SVSAX), SAAT Diversified Conservative into SAAT Moderate Strategy (SMOAX), SAAT Diversified Market Growth (SAGMX) and SAAT Diversified Moderate Growth (SAMGX) into SAAT Market Growth Strategy (SRWAX), and SAAT Diversified Aggressive Growth (SAGRX), SAAT Diversified Aggressive Stock (SAGSX), and SAAT Diversified U.S. Stock (SAUSX) into SAAT Aggressive Strategy (SEAIX). If shareholders approve the mergers, they are expected to take place March 25, 2011.
Bradley Brooks is no longer portfolio manager of Value Line Larger Companies (VALLX). The fund is now managed by Jeffrey Geffen.
Bernzott Capital Advisors, Contravisory Investment Management, and Kinetics Asset Management are no longer subadvisors for Absolute Strategies (ASFIX). The fund is now subadvised by Kovitz Investment Group, St. James Investment Company, Longhorn Capital Partners, Twin Capital Management, Aronson Johnson Ortiz, GMB Capital Management, Horizon Asset Management, Yacktman Asset Management, Mohican Financial Management, MetWest Asset Management, and SSI Investment Management.
The board of directors of SunAmerica Focused Value (SFVAX) approved changing the fund's name to SunAmerica Strategic Value Portfolio. Along with the name change, SunAmerica will take over portfolio-management responsibilities from current subadvisor Kinetics Asset Management.
The board of trustees of John Hancock Growth Opportunities (GMSGX) approved a reorganization of the fund into John Hancock Small Company (JCSAX). Given shareholder approval, the reorganization will take place March 23, 2011.
Tomoyuki Shioya is no longer a portfolio manager for Invesco Japan (AJFAX).
Effective Dec. 10, 2010, BNY Mellon Municipal Opportunities (MOTIX) reopened to new investors.
Mutual fund analyst Kailin Liu contributed to this report.
Courtney Goethals Dobrow does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.