Polar Capital to Launch Global Healthcare Investment Trust
Polar Capital will launch a new investment trust, the Polar Capital Global Healthcare Growth and Income Trust. The trust will invest in the higher growth healthcare industries, such as biotech, and will tap into emerging markets. It will have a fixed life until 18 January 2018, with dividends paid-out quarterly. Jointly running the trust will be managers Daniel Mahony and Gareth Powell who have managed the Polar Capital Healthcare Opportunities fund since its launch in December 2007. The duo have slightly outperformed their average peer in the Morningstar Sector Equity Healthcare category over their tenure, yet have fallen slightly short of the MSCI ACWI Healthcare Index.
AllianceBernstein to Launch European High Yield Fund
AllianceBernstein will expand its fixed-income range with the launch of AllianceBernstein Euro High Yield fund. The Luxembourg-domiciled fund will invest in predominantly in euro-denominated high yield corporate bonds, but it will also tap into other types of fixed-income securities such as investment grade corporate bonds. The fund will be targeted mainly at retail investors, but given the fairly specific focus, we believe investors should probably only be considering an investment in this area for a niche proportion of their portfolio, particularly as the launch comes after a strong year for euro high-yield debt.
Morningstar Places AxaRosenberg Funds Under Review
Axa Rosenberg announced that a coding error in their quant model may have resulted in unanticipated risks being assumed in funds managed by the firm. It is not yet known whether the error had a significant performance impact. Of concern though, is that it appears the error was not satisfactorily disclosed in line with Rosenberg’s internal policies. In the wake of announcement, the firm’s founder and co-head Dr Barr Rosenberg will take a one-month leave of absence and head of research Tom Mead will resign within 12 months.
Rosenberg has commissioned an independent review to assess why protocols were not adhered to, and the extent of any performance impact on their funds. Morningstar Europe had issued Standard ratings on four Rosenberg funds prior to this announcement: AXA Rosenberg Japan, American, European and Asia Pacific ex-Japan. The funds were competent enough, but the inner workings of their quant model were not disclosed, performance across their suite of funds was underwhelming, and their retail investor education material was below average, limiting our confidence. We have placed the Standard ratings Under Review. We’ll update our view when we have more detail on the nature of the transgressions and their impact on the funds.
HSBC Expands Tracker Range
HSBC Global Asset Management has this week announced its plans to launch a UK Gilt index tracker, the HSBC UK Gilt Index Fund. Its investment universe will span gilts in the FTSE-A British Government All Stocks Index. The fund is expected to launch in June 2010, subject to FSA approval. It will be available at an attractive total expense ratio of 0.25%, joining HSBC’s existing suite of low-cost trackers.
SWIP’s Catechis and Reynolds to Leave for Martin Currie
Kim Catechis, who heads the global emerging markets desk at Scottish Widows Investment Partnership, will be leaving to assume the same role at Martin Currie in November 2010. Catechis has been at SWIP since 1996 and has run SWIP Emerging Markets since. His results on the fund have been middling: over the last three, five and ten years it has landed in the third quartile of its Morningstar Emerging Markets Equity category. Joining Catechis from SWIP’s emerging markets team is Alistair Reynolds. Reynolds has worked at the firm since 2000, and he has most recently been coordinating his team’s research effort in addition to portfolio management responsibilities. Those recent hires reflect Martin Currie’s commitment to expanding its resources in the emerging market space which is needed as there are currently only three members in the team.
Morningstar’s Initial Take on the Goldman Scandal
Global stock markets experienced a widespread sell-off at the end of last week that continued into Monday trade after the SEC accused Goldman Sachs of fraud in relation to a subprime mortgage-based financial product. Goldman Sachs was charged by the SEC with fraud because of allegedly misstating and omitting key information about a collateralised debt obligation (CDO) that it marketed. The Morningstar equity analyst who follows Goldman gave his initial response to the news in this article on Friday but what are the wider implications of such a scandal and what does the average global investor need to know? In this video, Morningstar Australasia's Nicole Manktelow talks to Ibbotson Associates' Head of Fixed Income and Currency, Brad Bugg, to find out. You can read a transcipt of Goldman's first quarter earnings call, including management's response to analyst questions regarding the SEC complaint here.
Morningstar Qualitative Ratings and Reports Issued This Week
Morningstar issued new qualitative ratings and reports on a number of funds available to UK investors this week, including M&G Strategic Corporate Bond and Schroder Corporate Bond. Click here to see the full list.
[CT1]I assume you will link to an article?
