Fund Times: 4 - 8 August
Gartmore to Amend MultiManager Mandates and Consolidate Funds; iShares Adds to its Fixed Income Range; New Star Adds to Asia Team; SWIP Poaches Christian Elsmark to Strengthen European Efforts and M&G Appoints Director of Small-Caps.
Gartmore to Amend MultiManager Mandates and Consolidate Funds
Gartmore has announced its plans to merge the MultiManager UK High Alpha and MultiManager Global High Alpha funds into Gartmore MultiManager Absolute Return, subject to shareholder and FSA approval. The Absolute Return offering is a new fund that will launch in October 2008. Like others of its ilk, it will use long and short positions to try to earn positive returns in different market environments. Like all such offerings, however, whether or not it can actually do so over a sustained period remains open to question.
The MultiManager UK High Alpha fund launched just over 4 years ago and was managed by Gartmore veteran Bambos Hambi. Hambi stepped down from his role as head of the MultiManager team in April of this year, following the firm’s decision to review and condense the MultiManager range. The fund struggled during its lifespan, lagging its peers in the Morningstar UK Large-Cap Blend Equity category in each calendar year following launch; ironically generating negative alpha. The MultiManager Global High Alpha offering was also managed by Hambi since its inception and has also struggled– the fund took off well in its first year of launch, besting both its average rival in the Morningstar Global Large-Cap Blend Equity category and the MSCI World Free index, but lagged thereafter.
The mandates of the remaining three funds in the range, MultiManager Active, MultiManager Cautious and MultiManager Balanced, remain unchanged.
iShares Adds to its Fixed Income Range
iShares has launched two fixed income ETFs this week, iShares Global Inflation-Linked Bond and European Covered Bond. The former holds bonds in the Barclays World Government Inflation-Linked Bond index. The index constitutes 90 bonds from 10 different countries and spans 7 currencies. Inflation-linked ETFs are not new to the iShares range but this is the first with a global reach. Other inflation-linked ETFs offered by iShares include iShares € Inflation-Linked Bond, iShares £ Index-Linked Gilt and iShares $ TIPS. The Euro Covered Bond Fund holds bonds in the Markit iBoxx € Covered index which consists of 448 bonds. Some 416 of these are AAA-rated, with an average annual yield of 5.25% and duration of 4.25 years as at 30 June 2008, according to Barclays. Covered bonds boast an additional layer of protection since they have a pool of collateral to which investors have a preferential claim in case of default.
This launch reflects Barclay’s attempt to capitalise on the widespread risk aversion in global markets, as the ETFs are designed to provide diversity and liquidity and, in the case of the inflation-linked global ETF, a shield in an environment of rising inflation.
New Star Adds to Asia Team
New Star has hired Kanise Chan from Credit Agricole for its Hong Kong office. Chan will be Associate Director covering Greater China, taking charge of New Star’s institutional clients and retail fund distribution in the Greater China region. She has also held roles at the HSBC Group and the Bank of China International Holdings Limited.
The range of New Star Asian equity fund available for sale in the UK has not impressed thus far, with only New Star GIF Asian Opportunities and New Star Pacific Growth residing in the top-half of their Morningstar categories over the past five years.
SWIP Poaches Christian Elsmark to Strengthen European Efforts
Scottish Widows Investment Partnership has appointed Christian Elsmark as European Managing Director, a role it has newly created. Elsmark will be leading SWIP’s business growth across Europe. He will establish and develop relationships with pension funds, consultants, banks and other retail distributors, particularly in Scandinavia, Spain, Italy and Germany. His appointment comes soon after Blackrock snatched seven members of SWIP’s European Equities team in March of this year, including the head of the European Equities desk, Nigel Bolton.
Elsmark previously worked at FundQuest (the multi-management arm of BNP Paribas) as Managing Director for three years. Prior to that, he was head of investment services at T. Rowe Price and had worked at JP Morgan and Rothschild.
M&G Appoints Director of Small-Caps
M&G has appointed Louise Nash to head its small companies team, working closely with Simon Bailey, manager of the firm’s small-cap fund, M&G Smaller Companies. Nash joins M&G from Cazenove where she worked for 8 years, predominantly covering smaller companies. She managed the Cazenove UK Smaller Companies fund for about 15 months. Although she beat her average Morningstar peer, the time period is too short to be meaningful.
