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Executive Briefings


Mutual Funds Bleed $4.9B

Investors took $4.92 billion out of mutual funds in the week ended Wednesday, May 23, according to the Investment Company Institute.

Stock funds had outflows of $7.02 billion, up from $3.52 billion the previous week.

Domestic equity funds had estimated outflows of $7.20 billion. So far this year, investors have pulled $65.7 billion from funds that invest long-term in U.S. stocks.

PIMCO Offers Short Asset Fund

Newport Beach, CA-based PIMCO has filed paperwork with the Securities and Exchange Commission to launch the Short Asset Investment Fund, to bet on investment grade bonds. According to the filing, the fund will bet on a diversified portfolio of "fixed income instruments of varying maturities, which may be represented by forwards or derivatives such as options, futures contracts or swap agreements." It charges a management fee of 44 basis points.


Is the Alternative Hype Fading?

Morningstar, Inc. today released some sobering news about the alternative mutual fund space.

According to its fourth-annual national survey examining the perception and usage of alternative investments among institutions and financial advisors, the survey found that alternative mutual funds saw inflows of $23.2 billion in 2011($14.2 billion excluding the nontraditional bond category), while U.S. equity mutual funds bled $84.7 billion.

However, inflows were lower than prior years, and alternative exchange-traded fund inflows for 2011 were only $11.6 billion, the lowest level since 2006.


Fidelity Rolls Out Two Bond Funds

Fidelity Investments has unveiled its Fidelity Global Bond Fund and Fidelity International Bond Fund, available directly to investors, as well as through financial advisors.

Both funds, which invest in sovereign government debt and corporate and securitized credit securities, will be measured against a Gross Domestic Product-weighted index.

Leuthold Shuts Down Hedged Equity Fund

Minneapolis-based Leuthold Weeden Capital Management's Board of Directors of the Leuthold Hedged Equity Fund has decided to liquidate the underperforming fund.

The firm started liquidating the fund on May 16 and will distribute holdings of remaining shareholders on June 25, according to a filing.

American Beacon Launches Concentrated Equity Fund

Fort Worth TX-based American Beacon Advisors has launched the American Beacon The London Company Income Equity Fund (ABCAX), which is sub-advised by The London Company of Richmond, Virginia.

The fund will bet on 30 to 40 names, primarily with an average market capitalization of $70 billion or more. It charges a management fee of 45 basis points per year.

Virtus Dumps Harris for Newfleet

Shareholders of the Virtus Short/Intermediate Bond on May 18 voted to replace subadvisor Harris Investment Management with Newfleet Asset Management, and change the name of the fund to Virtus Low Duration, according to a filing.

The fund's investment objective was also revised to read: "The fund's investment objective is to provide a high level of total return, including a competitive level of current income, while limiting fluctuations in net asset value due to changes in interest rates."

Palmer Square Rolls Out Second Alt Mutual Fund, Preps Another

Leawood, Kansas-based Palmer Square Capital Management LLC, has launched its second alternative mutual fund, dubbed the Palmer Square SSI Alternative Income Fund.

The firm partnered up with Montage Investments, to raise some $160 million of investment capital to launch the long/short fund, which bets on convertible securities on the long side and shorts the common stock of the issuers of those convertible securities. The fund offers investor and institutional share classes, trading under the symbols PSCAX and PSCIX, respectively. It is sub-advised by Beverly Hills, CA-based SSI Investment Management and charges a management fee of 130 basis points.


Teucrium Names Its COO

Teucrium Trading, LLC has named Steve Kahler, who joined the firm in November 2011, as its chief operating officer.

Kahler, who has spent most of his professional life trading agricultural commodities, will directly oversee Teucrium's Trade Execution operations and will, along with Sal Gilbertie, Teucrium's president and chief investment officer, design the trade execution strategy.

Loomis "Bankes" On New Head Trader

Loomis, Sayles & Company has hired Rowland "Chip" Bankes as its Head of Trading, responsible for the management of the company's overall trading, effective May 21.

Bankes will report to Jae Park, chief investment officer, fixed income, and will also oversee the firm's equity trading desk. Susan Short Green will continue in her role as director of equity trading, reporting directly to Bankes.

Copeland Throws Granade Into the Mix

Conshohocken, P.A.-based Copeland Capital Management has hired Erik B. Granade as Head of International Equities.

Granade was formerly with Invesco, where he served as chief investment officer for their global equity team.

In his new post, Granade will lead the launch of both traditional and tactical International Dividend Growth products, as well as a Global Dividend Growth hedge fund, according to Eric C. Brown, chief executive officer.


Hancock Funds' CEO Steps Down

Keith Hartstein, president and CEO of John Hancock Funds, will be retiring in September 2012 after 22 years at the firm, Money Management Executive has learned.

According to a statement from the firm, "Hartstein has played a pivotal role in establishing the company's mutual fund franchise successfully transforming it into one of the fastest growing and diverse mutual funds companies in the U.S. Under his direction, the business achieved record sales, elevated assets under management to record highs, and amassed an impressive list of top performing funds within an industry leading multi-manager investment platform."


$38B in assets now fill John Hancock Fund's coffers keith Hartstein's watch as CEO from July 2005 through the first quarter of 2012.

That's up from $24 billion. Assets under Hartstein bottomed in March 2009, at $16.7 billion.

Source: Morningstar

14% of U.S. institutions currently use ETFs in their portfolios, according to the results of the Greenwich Associates 2011 U.S. Investment Management study.

Among current ETF users, 405 of institutional funds and one-third of investment managers expect to increase allocations to ETFs within the next 12 months, while 22% of institutional funds and 14% of asset managers plan to trim ETF allocations.

Source: Greenwich Associates