Advertisement
Skip to Content
Fund Times

Broadview Bringing the FMI Focus Fund In-House

As part of the transition, the Silver-rated fund's expense ratio is estimated to drop by more than 10%. Also, a new manager for Fidelity Pacific Basin, GMO announces plans to begin tapping the firm's asset-allocation forecasts in its strategies, and new names for 5 Aquila funds.

Silver-rated  FMI Focus (FMIOX) will be getting a new moniker as part of a reorganization.

Broadview Advisors, the longtime subadvisor to FMI Focus, will be bringing the mutual fund in-house. As a result, the fund will be reorganized into the to-be-formed Broadview Opportunity Fund at the end of November 2013, pending shareholder approval. Rick Lane, lead manager on the fund since 1997, co-founded Broadview in 2001 after managing the fund as part of Milwaukee-based Fiduciary Management Inc. (FMI) from 1997 through 2001. After an amicable split, FMI remained the advisor to the fund, but Broadview has operated independently of FMI since its founding. Lane, who currently owns 100% of Broadview, had indicated in the past that an ownership transition to bring the fund in-house was a long-term goal for the firm.

Broadview has been working closely with fund services company ALPS to help facilitate the transition. A member of ALPS' team will be named chief compliance officer of the fund, and ALPS will handle the bulk of the back-office tasks related to managing a mutual fund. A positive for shareholders and prospective investors is that ALPS has estimated the expense ratio on the fund will drop to 1.12% from 1.26% as a result of the transition.

Coinciding with the reorganization, there are plans in the works to broaden the ownership stake of Broadview in the near future. As a result, comanagers Rick Whiting, Faraz Farzam, and Aaron Garcia will be awarded meaningful ownership stakes in the firm, reflecting their contribution to the process. This should help ensure continued stability for the fund's investment professionals.

Fidelity Pacific Basin Gains New Manager
On Oct. 18, Fidelity Pacific Basin (FPBFX) underwent a manager change as longtime manager Dale Nicholls stepped aside and was replaced by John Dance.

The manager change on the $695 million fund was one of the final manager changes required by the recent split between Fidelity Management & Research and its affiliate Fidelity Worldwide (formerly known as FIL) that happened this year. Now, all U.S. funds' strategies are run by FMR portfolio managers, who use only FMR global analysts rather than relying on FIL analysts as they had in the past.

Nicholls, who recently relocated to Hong Kong after being based in Singapore since 2003, will continue working on funds available exclusively to overseas investors. This includes Fidelity Pacific, which is a Luxembourg-domiciled fund sold all over Europe and Asia. Morningstar's Hong Kong-based analyst team rates that fund a Bronze.

Dance has been with Fidelity Management & Research since 2008, when he joined as a research analyst. In 2011, he began managing the consumer discretionary subportfolio of Fidelity International Equity Central Fund. He then became co-sector leader of the combined consumer discretionary and consumer staples team in 2012. Prior to 2008, Dance had worked for FIL as a research analyst.

GMO to Start Using Its Asset-Allocation Forecasts in Its Funds
GMO announced in a filing that in November its global equity team will begin incorporating the firm's asset-allocation forecasts into its various strategies. This change will affect the following 11 equity funds: Neutral-rated U.S. Core Equity (GMCQX), Silver-rated International Core Equity , U.S. Intrinsic Value , Silver-rated International Intrinsic Value (GMOIX), U.S. Growth , Silver-rated International Growth Equity III , U.S. Small/Mid Cap , International Small Companies , Real Estate , Tax-Managed International Equities (GTMIX), and Developed World Stock . There will not be any changes in management titles, but Ben Inker and Sam Wilderman from the asset-allocation group will provide additional oversight of the equity strategies. David Cowan and Thomas Hancock will continue to lead the funds' day-to-day management.

Aquila Renames 5 Funds
On Monday, the Aquila Group of Funds, which offers seven single-state municipal-bond funds, announced the renaming of five funds to boost its brand awareness.

In a statement, the firm's CEO, Diana Herrmann, noted that "first and foremost, we want investors and their financial advisors to readily recognize the full range of funds we offer and the opportunity, within our product line, to meet a range of investment objectives. Adding the Aquila brand name to our municipal-bond funds is an essential step in that direction."

With the changes, the following five funds have taken on new names:

  • Tax-Free Trust of Arizona is now Aquila Tax-Free Trust of Arizona (AZTFX)
  • Tax-Free Fund of Colorado is now Aquila Tax-Free Fund of Colorado (COTFX)
  • Churchill Tax-Free Fund of Kentucky is now Aquila Churchill Tax-Free Fund of Kentucky (CHTFX)
  • Tax-Free Fund for Utah is now Aquila Tax-Free Fund for Utah (UTAHX)
  • Tax-Free Trust of Oregon is now Aquila Tax-Free Trust of Oregon (ORTFX) 

One other fund, Aquila Narragansett Tax-Free Income Fund (NITFX), already had the Aquila name in it. And Aquila's seventh fund, the $814 million Hawaiian Tax-Free Trust (HULAX), is not undergoing a name change at this time.

Senior fund analysts Michelle Canavan Ward and Kevin McDevitt, and fund analysts Robert Goldsborough, Flynn Murphy, and Kathryn Spica contributed to this report.

Morningstar Fund Analysts does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.