Plamen Monovski, the lead manager of the BlackRock Emerging Markets fund, has left the firm. This departure occurs less than a month after that of Alan Bourrier, who formerly co-managed the Emerging Markets fund with Monovski and Will Landers. After Bourrier’s departure, Monovski took the lead on this offering and Landers focused on his offshore Latin American fund. We never like to see such rapid turnover as it can lead to instability in process and reduce the quality o
f research.
Going forward, Daniel Tubbs and Dhiren Shah, who became deputies to Monovski after Bourrier left, will be the leads on BlackRock Emerging Markets. Sam Vecht, who replaced Bourier on the offshore Emerging Europe fund, will take full responsibility for that vehicle.
F&C changes asset allocation on the Multi-Manager Distribution fund
As of the 1st of August, the flexibility of the mandate of Dean Cheeseman’s F&C Multi-Manager Distribution fund will be increased. The neutral asset allocation of this fund since launch has been 50% fixed income, 30% equity and 20% commercial property. The new benchmark allocation will keep the bond and equity components constant, but will broaden the scope of the 20% currently allocated to commercial property to include other alternatives like commodity and absolute return funds. In addition, a variance of 15% around the benchmark targets will be allowed.
While there are well known benefits to diversification, and F&C says it has consulted with a number of its large clients, we note that some investors in the fund face being in a vehicle that is quite different from the one they originally invested in. Apart from the broadened alternatives, the variance of 15% can lead to a fund that has, for instance, an allocation to fixed income of only 35% and up to 45% in equities, which has the potential to make it significantly riskier than its target benchmark.
Vanguard reported to have made a bid for Barclays’ iShares
Several media outlets reported a Vanguard bid of $5 billion for Barclays’ iShares. If successful, this would create potential antitrust ramifications, with the merged company having 60% of the ETF market in the US. To read more on the potential ramifications of the bid click here. It's also an interesting move insofar as Vanguard is a mutually owned company--that is, the owners of its funds collectively own Vanguard--and it's unclear why these fundholders would pay to finance such an acquisition, or if there is another source of capital involved.
At the same time, Vanguard recently announced plans to enter the UK market, and a successful bid could help build its presence here. To read more on Vanguard’s planned UK expansion, click here.
Thames River Capital makes five appointments to global credit and European equity teams
Thames River Capital announced five senior appointments, expanding its Global Credit and European Equities teams. Two of the hires are fund managers Stephen Drew and Simon Ulcickas, who are joining the Global Credit team. Drew has 18 years’ experience in credit, having previously worked at Tudor Capial and JP Morgan Chace. He will be co-manager on the Hillside Apex and High Income funds along with Bernt Tallaksen and Mehrdad Noorani. Ulcickas, who has 8 years’ experience, previously worked at JP Morgan and KBC Financial Products.
On the Equity team, James van den Bergh has been hired to co-manage the Kingsway fund. His previous experience is in European long/short funds at SAC Global Investors. A former colleague, Omer Tore, will join him as an investment analyst. Thames River’s Jeff Thomson will also be co-manager on this fund. Finally, Carlos Moreno, formerly manager of the Fidelity UK Growth fund, will also be joining the European Equity team. Our records show he underperformed the Morningstar UK Large-Cap Growth Equity category during his tenure at that offering.
Close Asset Management lives up to name, closes four funds
Close Asset Management plans to shut four of its Dublin domiciled funds due to their small size and high TERs. The funds facing closure are Close Investments Far East Equity , externally managed by UOB Asset Management's Wong Ann Derk, Close Investments Continental Europe Equity, run by 2CG's Charles Glasse and Christopher Garsten, and Mark Parry's Close Enhanced Gilt and Close Global Growth funds.
Pimco enters the ETF arena
PIMCO, the largest bond manager in the world (apart from the Chinese government), unveiled its first exchange-traded fund this week and filed a preliminary prospectus for six more ETFs. The funds are for US investors. PIMCO runs about $750 billion in assets and grew famous through the investment prowess of its fixed-income managers and traders, in particular all-star manager Bill Gross, who has won Morningstar US's Fixed Income Manager of the Year Award multiple times.
While there is much to like about PIMCO entering the ETF space, the now-issued ETF is less than earth-shattering. The new fund, PIMCO 1-3 Year US Treasury Index, follows the follows the Merrill Lynch 1-3 Year U.S. Treasury Index and will undoubtedly hold an almost-identical portfolio to iShares Barclays 1-3 Year Treasury Bond. The prospectus for the new ETF even specifies that none of PIMCO's positioning talents will inform the portfolio: "Unlike many investment companies, the Fund does not attempt to outperform the index the Fund tracks." The other six ETFs announced in an additional filing today include the same key phrase in their descriptions of the funds' strategies. PIMCO plans to issue three more ETFs based on specific slices of the Treasury maturity curve, covering 3-7-year, 7-15-year, and 15+-year maturities. The other three offerings, which are focused on US inflation indexed bonds, are: PIMCO Broad U.S. TIPS Index Fund, PIMCO Short Maturity U.S. TIPS Index Fund and PIMCO Long Maturity U.S. TIPS Index Fund.
To read more on PIMCO’s entrance into the ETF arena, click 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 Skagen Kon Tiki and Franklin Mutual European. Click here to see the full list.
