Manager Changes at Skandia Signal Shift in Strategy
May 13, 2002
American Skandia has made several changes to its mutual fund and annuity portfolio line ups. Skandia has created two new mutual funds and three new annuity portfolios, while consolidating and replacing managers on several annuity sub-accounts. The moves signal a shift in investment strategy to lower risk and provide more consistent management, according to the firm.
Skandia's changes to its sub-accounts raise the profile of Deutsche Asset Management (DeAM). Deutsche Asset Management, which formerly managed one mutual fund and one variable annuity portfolio, now manages a total of 11 of these products.
Explaining the changes, Michael Murray, chairman of American Skandia's investment committee, said, "We mean to meet or beat benchmarks at a lower level of risk."
On its adviser Web site, American Skandia explained that Deutsche Asset Management brings an expanded selection of "managed Alpha" investing to the complex. "A managed Alpha strategy combines an investment strategy that seeks to offer a benchmark index risk while outperforming the benchmark index through active stock selection," according to the Web site.
Deutsche Asset Management has taken over investment management for an international small-cap fund formerly sub-advised by Founders. It has also assumed management for an annuity portfolio previously operated by Janus, the AST Janus Strategic Value Portfolio, and one previously managed by Founders, the AST Founders Passport Portfolio. In addition, Deutsche Asset Management is now sub-advising the AST AIM Balanced Portfolio, previously managed by AIM. The portfolios, respectively, have $70 million, $230 million and $448 million in assets under management.
The two new mutual funds are ASAF DeAM Large-Cap Growth Fund and ASAF DeAM Large-Cap Value Fund. The three new variable annuity sub-accounts are AST DeAM Large-Cap Growth Portfolio, AST DeAM Small-Cap Value Portfolio and AST DeAM Bond Portfolio.
Janus continues to sub-advise two mutual funds and two VA sub-accounts, but Founders and AIM have now disappeared from American Skandia's line up. Murray said that while the firm is keeping an eye on Janus's management of its funds, American Skandia does the same with all its sub-advisors.
American Skandia is also eliminating two sub-accounts through consolidation. "We wanted to make sure that the asset classes were viable going forward," Murray said, adding that both the company and shareholders will benefit from the changes.
With the consolidation of the two sub-accounts, sub-advisors Kinetics Asset Management and Scudder Investments also disappear from American Skandia's roster. The AST Kinetics Internet Portfolio, with only $4.2 million in assets under management, will be rolled into the AST Gabelli All-Cap Value Portfolio. Murray said that this change was based on performance and assets, and unrelated to the recent departure of Kinetics CEO Steve Samson [see MFMN 4/29/02].
Similarly, the AST Scudder Japan Portfolio, which has only $5.9 million in assets under management, will be rolled into the AST American Century International Growth Portfolio. "We felt more comfortable with a diversified international approach rather than a Japanese mandate," Murray said.
American Skandia has also more than doubled its number of ProFunds sub-accounts, adding 20 to accommodate active trading advisors.