American Century announced that it will close the long-struggling American Century Vista Fund (TWVAX), merging the mid-cap growth strategy's assets into another mid-cap growth fund, American Century Heritage (ATHAX). The merger will take place Dec. 6, 2013. In the case of the NT (no tobacco) shares of the fund, which are used in the firm's One Choice target-date funds, the switch will take place sooner, on Oct. 11.
A $1.5 billion fund, Vista has experienced both underperformance and manager turnover since 2008. And since previous lead manager Glenn Fogle left the firm in 2009, the new management team has not been able to right the ship. The fund's trailing five-year returns through Sept. 25, 2013, rank in the mid-cap growth category's bottom decile. Vista currently receives a Morningstar Analyst Rating of Neutral. It is fortunate for the fund's investors that American Century has a comparable strategy in Bronze-rated Heritage, which has $4.4 billion in assets. Lead manager David Hollond has been running the strategy since 2007.
T. Rowe Price Files for Nontransparent Actively Managed ETFs
On Monday, T. Rowe Price (TROW) filed with the SEC for the ability to offer nontransparent, actively managed exchange-traded funds. The firm previously received exemptive relief to offer transparent ETFs, though it has yet to launch any products. Daily disclosure requirements make the ETF vehicle unappealing for many active equity managers, who fear investors could front-run their trades. The exemptive relief that T. Rowe is seeking in its latest filing would help get around that. The strategies included in the filing are Capital Opportunity (an analyst-run strategy that is sector-neutral to the S&P 500 Index) and Blue Chip Growth. However, the firm says these would not necessarily be the strategies launched first, if it decides to launch any at all. T. Rowe's request comes a few weeks after Eaton Vance (EV) submitted a similar proposal to the SEC. BlackRock (BLK), Vanguard, and State Street (STT) also have made similar proposals.
Emerging-Markets Corporate Bond Portfolio Manager Departs PIMCO
Brigitte Posch, lead manager of the $1.2 billion PIMCO Emerging Markets Corporate Bond (PEMIX) since its July 2009 inception, left the firm effective Sept. 20 to pursue another professional opportunity that has not yet been disclosed. Prior to joining PIMCO in 2008, she was a managing director and head of Latin American securitization and trading at Deutsche Bank.
Posch reported up to the firm's co-heads of emerging markets, Michael Gomez and Ramin Toloui, and had been based in PIMCO's Munich office since 2012. Upon Posch's exit, Gomez became lead portfolio manager of the firm's emerging-markets corporate portfolios, including PIMCO Emerging Markets Corporate Bond. Gomez has been at PIMCO for a decade and has been co-head of the firm's emerging-markets group since 2006. He is the lead manager on several emerging-markets mutual funds for the firm, including Morningstar Medalists PIMCO Emerging Markets Bond (PEBIX), PIMCO Emerging Markets Currency (PLMIX), and PIMCO Emerging Local Bond (PELBX). While this is the first dedicated emerging-markets corporate fund that Gomez has taken a lead management role on, he has been overseeing the firm's emerging-markets corporate investments as head of the group since 2006.
Posch's departure is certainly a loss, but PIMCO maintains a deep emerging-markets team with 17 dedicated portfolio managers in total. That includes Kofi Bentsi and Ronie Ganguly, who were hired in June 2012 and May 2013, respectively, in an effort to continue building out the firm's emerging-markets corporate business. PIMCO also has begun a search for a senior-level hire to continue expanding its emerging-markets corporate team.
Oppenheimer Moderate Gains New Manager
Oppenheimer Moderate (OAMIX) has a new manager. Mark Hamilton, who spent 18 years at AllianceBernstein (AB) before joining Oppenheimer in the spring of 2013, is replacing Krishna Memani and Alan Gilston, who had run the $1.4 billion fund since 2010. Upon joining the firm in April, Hamilton was named named Oppenheimer's chief investment officer for global allocation and took the reins at the Neutral-rated, $1.8 billion Oppenheimer Global Allocation (QVGIX).
Hamilton's most recent portfolio-management experience was on the tiny ($12 million) world-allocation offering AllianceBernstein Dynamic All Market (ADAAX). His experience overseeing investments in a broad range of asset classes seems to be a better fit for Oppenheimer Moderate compared with Memani and Gilston, who specialize in fixed income and equities, respectively. That said, Hamilton ran Dynamic All Market for less than 16 months (until March 2013). And prior to that, he spent just less than two years on the management team of the AllianceBernstein Retirement Strategy target-date series. Those track records are too short to be indicative of Hamilton's prospects here.
New Manager for Ivy Global Natural Resources
A new manager recently took over Neutral-rated Ivy Global Natural Resources (IGNAX).
Longtime manager Fred Sturm retired from the fund's subadvisor, Mackenzie Investments, on Aug. 31 at age 53. A month earlier, Sturm had stepped down from Ivy Global Natural Resources, bringing to a close one of the longest manager tenures in the natural-resources category.
With Sturm's retirement, Ivy Global Natural Resources' advisor, Waddell & Reed (WDR), decided to use in-house management for the $2 billion fund. As such, Waddell & Reed promoted David Ginther to replace Sturm. He is no newcomer; Ginther joined Waddell & Reed in 1995 as an analyst and previously had worked in the energy industry from 1986 until 1995. Ginther has never managed a natural-resources fund, but since 2006 he has managed the $145 million Ivy Energy (IEYAX), which targets a related area and which he will continue managing. Ginther also spent exactly a decade managing the $336 million Ivy Dividend Opportunities (IVDAX) and the $684 million Waddell & Reed Dividend Opportunities (WDVAX), dropping those funds in July to take over Natural Resources. We note that Ginther posted mixed results with Dividend Opportunities but has delivered better results at Ivy Energy.
Heavily assisting Ginther--although not a named manager--is Ivy Global Natural Resources' dedicated metals and mining analyst, Mick Wolverton, who has been with Waddell & Reed for eight years. Wolverton serves as the fund's assistant portfolio manager.
As an aside, Ivy Dividend Opportunities' new manager is Cynthia P. Prince-Fox. She also is the longtime manager of the $1.2 billion Ivy Balanced (IBNAX), among other funds.
Senior fund analysts Karin Anderson, Kevin McDevitt, and Katie Reichart, fund of funds strategist Josh Charlson, and fund analysts Michelle Canavan, Robert Goldsborough and Kailin Liu contributed to this report.
Morningstar Fund Analysts does not own shares in any of the securities mentioned above.
- Mutual Funds
- Michael Gomez