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Executive Briefings


Mutual Funds Lose $1.37 Billion

Mutual funds logged another brutal week, posting a third overall outflow this year, according to the Investment Company Institute.

In the week ended June 6, investors withdrew $1.37 billion. The year's biggest outflows came in the weeks ended January 4 and May 23, when $5.38 billion and $4.90 billion, respectively, were pulled.

Hennessy Adds 10 FBR Funds

Hennessy Advisors, Inc. has signed an agreement with FBR Fund Advisers, Inc. to buy the entire family of 10 FBR Funds. Those funds have assets exceeding $1.9 billion. Hennessy Advisors will manage more than $2.7 billion after the deal.

Hennessy will initially pay $28.7 million for the assets. The deal is expected to be completed in the third quarter of 2012.


MainStay Is In NY, Tax-Free State of Mind

MainStay Investments, a New York Life company, has added the MainStay New York Tax Free Opportunities Fund, the firm's first state-specific municipal bond strategy, to its portfolio.

The fund is managed by Robert DiMella and John Loffredo at affiliate MacKay Shields LLC. According to Mainstay, New York issues about 15% of the supply in the entire municipal marketplace, second only to California, creating the opportunity to manage diversified portfolios and deliver a relatively better return within the state of New York.

Virtus Plans Five Fund Rollouts

Hartford, Conn.-based multi-manager shop Virtus Investment Partners, Inc. has filed with the Securities and Exchange Commission to open five new open-end mutual funds.

The new offerings include the Virtus Herzfeld Fund, the Virtus Wealth Masters Fund, the Virtus Emerging Markets Equity Income Fund, the Virtus Emerging Markets Debt Fund, and the Virtus International Small-Cap Fund. The funds are expected to be launched later this year.

An RIA Launches Its Maiden Fund

Elkhart, Indiana-based Martin Capital Management, LLC, has launched its maiden mutual fund, the Martin Focused Value Fund (MFVRX/MFVIX), which will bet on undervalued shares of publicly traded U.S. companies.

The fund is managed by firm founder Frank K. Martin and has an expense ratio of 140 basis points. According to Martin, the fund is not compelled to be 100% invested and will even hold a large portion of its portfolio in cash "if we're not finding bargains - or if we feel that global economic threats pose a significant risk to investors' capital."

Neuberger Rolls Out Multi-Manager Alt Fund

Neuberger Berman Group last week launched the Neuberger Berman Absolute Return Multi-Manager Fund (NABAX), which bets on a slate of hedge fund managers.

The fund's sub-advisers include: The Boston Company for long/short and mid-cap equities; Cramer Rosenthal McGlynn for global long/short equities; GAMCO Asset Management for merger arbitrage; Levin Capital Strategies for event driven investments; Sound Point Capital for distressed and event-driven credit; Turner Investments for long/short healthcare equity; and Visium Asset Management for event-driven investments.


ETF Assets Up 7%: State Street

U.S. exchange-traded funds assets totaled $1.12 trillion as of May 31 - up 7% year-to-date, according to the ETF Snapshot May 2012 released by State Street Global Advisors.

In May, investors added $5.3 billion more to ETFs than they withdrew-despite disappointing equity performance. The S&P 500 Index decreased 6% while the MSCI EAFE Index fell 11.5% during the month.

Academics Say Managers Are Just Lucky

Does manager experience matter in a mutual fund? Maybe not, according to new research by Bryant University Professor of Finance Jack W. Trifts.

According to Trifts and Gary E. Porter, associate professor of finance at John Carroll University's Boler School of Business, even the best solo mutual fund managers seem to get worse at their craft the longer they practice it.


J.P. Morgan Snags Former Russell Exec

J.P. Morgan Asset Management has added Robert Stark to lead its Strategy and Business Development unit. He will be based in New York and will be responsible for growing the firm's Asset Management unit globally. He reports to David Brigstocke, chief financial officer.

Stark joins the firm from Russell Investment where he served as Global Head of Strategy and M&A. Previously, he spent more than a decade at McKinsey & Company, most recently as a partner in the financial services sector focusing on insurance, asset management, investment banking and private equity.

ICI Adds Political Affairs Officer

The Investment Company Institute has hired George Shevlin as its new Political Affairs Officer, responsible for managing the Institute's political program, including the Political Action Committee. Additionally, he will work to reinforce the Institute's relationships with key constituents on Capitol Hill and in the Administration and with other organizations.

Shevlin most recently served as staff director to the House Democratic Caucus. Prior to that, he served as the staff director for the House Committee on Administration.

ING Beefs Up DCIO Unit

ING Investment Management US has ramped up its defined contribution investment only team with a trio of new hires.