Fund Times: 15 - 19 March
M&G’s Jim Leaviss hands over three bond funds to Mike Riddell; Ashmore announces the launch of eight emerging market funds; HSBC to launch European long-short fund; Lyxor will launch up to 60 new ETFs in 2010.
Jim Leaviss, M&G’s head of retail fixed income, will hand over management of the M&G Index-Linked Bond, International Sovereign Bond and Emerging Markets Bond funds to Mike Riddell. M&G has a deep pool of talented analysts and investment staff, so it makes sense to develop funds management expertise internally, particularly as idea generation for these funds is likely to be heavily driven by M&G’s macro and top-down strategies. Riddell will be able to draw on the input of more experienced managers such as Leaviss, and corporate bond manager Richard Woolnough. Riddell has spent six years in bond markets but this change will be a challenge for Riddell as he moves from a product specialist role to his first stint at funds management. Leaviss has retained management responsibilities on the higher profile M&G Gilt & Fixed Interest Income (which we covered here), High Yield Corporate (covered here) and Global Macro Bond funds.
Ashmore announces the launch of eight emerging market funds
Ashmore has added eight funds to its Luxembourg-domiciled SICAV, bringing the total number of funds in the suite to 12. The new offerings include a range of debt, equity and currency funds, all focused on Ashmore’s speciality, emerging markets. As reasons for launching the funds, Ashmore cited increased client demand for diversification in emerging markets, and that emerging markets are relatively less risky than they have historically been perceived. All the funds will have institutional and retail share classes, although the retail classes have a minimum investment of £25,000. We view these investments as highly specialised we think most retail investors would find a broad emerging market bond or global bond fund more appropriate.
HSBC to launch European long-short fund
HSBC Global Asset Management will launch the HSBC GIF European Alpha Equity Fund in April – a UCITS III European equity long-short fund that will invest mainly in equities and equity swaps. The fund will target equity-like returns and annualised volatility of 10%. As with any absolute return fund, investors need to understand that a stated target return or volatility level may be difficult or impossible to achieve, which is why we often object to such stated targets—in our view, they give a veneer of certainty to an activity that is characterised by a high degree of uncertainty. Beyond that, investors should ensure they understand how the fund intends to try to achieve its target return, how much they will pay for the fund, and whether the manager has the experience and resources necessary to achieve the fund’s goals.
Lyxor will launch up to 60 new ETFs in 2010
It was reported this week that Lyxor intends to launch up to 60 new ETFs this year. While this could increase competition in the ETF and index tracker market, we are somewhat concerned by the increasingly highly specialised nature of ETFs—many track exceedingly narrow slices of the market and we think investors have a hard time using such focussed offerings well. This follows on from Vanguard’s expansion into Europe which we discussed here and a general trend towards lower fees in trackers and ETFs, examples of which we covered here.
Morningstar qualitative ratings and reports issued this week
Morningstar issued new qualitative ratings and reports on a number of funds available to UK investors this week, including M&G Corporate Bond and Investec Japan. Click here to see the full list.
