Fund Times: 5 - 9 July
David Jane departs M&G; Ignis to end JV with Hexam; Liontrust to launch new bond fund; IMA sector changes; and more.
David Jane Departs M&G Amid Reshuffle
It was announced this week that David Jane will leave M&G. A clear reason was not cited although M&G said Jane’s departure follows changes to its senior equity team including the appointment of Dave Fishwick into the newly created role of head of retail investment management, while chief of equities Ed Rosengarten will also leave the business. Jane was head of equities, and managed the M&G Managed and Cautious Multi-Asset funds. Morningstar’s Superior rating of M&G Managed has been placed under review following the announcement. Both funds will now be run by George Tsinonis, who was Jane’s deputy and also runs the M&G Global Dynamic Allocation fund. We see no reason for investors to panic at this stage and will update Morningstar’s report on M&G Managed when we have met with Tsinonis.
Ignis to End Joint Venture with Hexam
It was reported this week that Ignis Asset Management has amended its equal ownership structure with emerging-markets fund manager Hexam. Ignis retains a 35% minority stake and a seat on the Hexam board, but will cease to provide distribution support. It is anticipated that other operational activities will eventually be outsourced to third-party providers appointed by Hexam.
Liontrust to Launch New Bond Fund after Axing Global Equities Desk
It was reported this week that Liontrust will launch a credit fund in the third quarter of 2010. It will reportedly have a global focus. The announcement comes as something of a surprise given that Liontrust only last week axed its global equities team, citing a desire to focus on its existing product offering. Liontrust only began building the global rquity team in late 2009. In early 2009, fund managers Jeremy Lang and William Pattison departed Liontrust, creating a significant challenge for the group given the pair managed the group’s flagship funds: First Large Cap, Focus 350, First Growth and First Income. Since the departure, the group does not appear to have had a clear direction and its share price has floundered, recently dropping below the low point of January 2009. Since this announcement Liontrust stated that, having completed a review of its business and deciding to cut the global equities team, no more teams will be cut.
IMA Announces Changes to UK Equity Income Sectors
The IMA announced last week that it has reverted to administering a single UK Equity Income sector, effective from 1 July 2010. The UK Equity Income and Growth sector will be disbanded, having only been formed in March 2009. Funds in the Income & Growth sector will be recombined with the UK Equity Income sector. The yield target for funds in the UK Equity Income sector will remain 110% of the yield on the FTSE All Share index. However, funds will be required to achieve the 110% target over rolling three-year periods. According to the IMA, funds that fail to achieve the yield requirement over that period will be removed from the sector. Funds will still need to aim for 110% yield in any given year. However, there will be an absolute minimum 12–month yield requirement of 90% of the FTSE All Share, a figure that seems oddly low for funds mandated to produce income.
T Bailey to Launch Second Cautious Managed Fund
T Bailey announced it will launch the T Bailey Defensive Cautious Managed fund, with the aim of investing across a range of asset classes, largely through collective investment schemes. One point investors should check is the cost, as fees can easily ratchet up in multi-manager funds due to multiple layers of management. T Bailey already has a fund in the same IMA sector: the T Bailey Cautious Managed fund. At a glance, the new fund appear sufficiently differentiated because it will have a strategic exposure to equities of only 25%, versus 50% for T Bailey’s existing fund.
Katharina Hoyland Leaves Invesco
It was reported this week that Katharina Hoyland will leave Invesco to devote more time to her family. Stephanie Butcher has taken over her Invesco Perpetual European Equity Income fund, and will take over the equity portion of the Invesco Perpetual European High Income fund in November 2010.
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 PIMCO GIS Total Return Bond and BGF Asian Dragon. Click here to see the full list.
