Ziegler Adopts New Focus for Fund Group
April 9, 2001
The Principal Preservation Portfolios have been renamed the North Track Funds and it has the first two of possibly several new index funds to track Dow Jones indexes in registration.
The Principal Preservation fund group is managed by B.C. Ziegler & Co. the investment advisory arm of The Ziegler Companies of Milwaukee. The group includes eight mutual funds with total assets under management of $1.2 billion.
The initiatives are part of a change in the fund group's strategy that would recast the complex as a niche group that aims to provides best-of-breed index funds sold solely through financial intermediaries, said John J. Mulherin, president and CEO of The Ziegler Companies.
The recent initiatives are also aimed at further strengthening Ziegler's investment management unit, the only one of Ziegler's four business units which was profitable in 2000, according to the company's 2000 annual report.
The name change, effective March 1, was precipitated by the group's desire to break out of its 17-year-old reputation as a mostly fixed-income, conservative investment group, the company said in a statement. The fund family was founded in 1984. The group is now adopting an equity indexing approach while maintaining its actively managed portfolios and its fixed-income funds, according to company statements. The North Track name will better reflect the fund group's intention of tracking specific economic sectors, the company said. The group has also adopted a new corporate logo and a tag line: "Sharpen Your Focus."
"Our previous strategy of filling up every Morningstar [fund] style box wasn't working," said Mulherin.
The group's former Principal Preservation Select Value Fund, for example, had only attracted $9 million in assets since its inception in August, 1994.
The value fund did not mesh with Ziegler's new direction, said Mulherin. So Ziegler won approval from shareholders to merge the fund into one with a similar objective and investment focus managed by Nationwide Financial of Columbus, Ohio. The merger was completed March 5.
Mulherin became president and CEO of The Ziegler Companies in February 2000, replacing Peter Ziegler, who resigned those posts but remained chairman of the firm. Mulherin began to reposition the company by focusing on more profitable business lines. He reiterated in a statement in February, the company's decision to strengthen the company's proprietary mutual fund unit by changing strategy. Mulherin came to Ziegler from Villanova Capital of Philadelphia, the asset management division of Nationwide Financial, where he was chief administrative officer. Before Villanova, Mulherin was the president of National Financial Correspondent Services of Boston, a Fidelity Investments subsidiary.
The North Track Funds include two index funds, two actively-managed funds, three fixed-income funds and a money market fund. The two new index funds in registration are expected to be introduced April 17, Mulherin said.
These are the first funds of their kind to parallel their respective indices, the firm said. The North Track Dow Jones U.S. Health Care 100 Plus Fund will closely parallel, but not exactly replicate, the 100 stocks in the Dow Jones U.S. Health Care Sector Index. A second fund, the North Track Dow Jones U.S. Financial 100 Plus Fund, will loosely track the 100 stocks that comprise the Dow Jones U.S. Financial Sector Index.
Ziegler currently manages another unique index fund, the PSE Tech 100 Index Fund. Ziegler has an exclusive licensing arrangement with the Pacific Securities Exchange to track the 100 stocks which make-up the exchange's tech stock index. In its 2000 Annual Report, filed with the SEC March 28, the company disclosed that most of last year's asset inflows were into its technology index fund.
The North Track Funds' strategy is to follow demographic trends, the company said. Ziegler wants to focus on the three fastest growing market sectors - technology, health care and financial services - which have been the fastest growing sectors over the past two decades.