Fund Times: Updates for Advance, AMP, Perennial Real Estate, Portfolio Partners
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In recent news from the funds management industry you may have missed, Advance is now offering dedicated exposure to global shares manager Tradewinds; AMP has hired for its Capital domestic equities team, and Perennial for its property team; and Portfolio Partners has announced details of its rebranding, and changes to a number of its funds' investment mandates.
Advance offers global shares manager Tradewinds
St. George Bank funds management business Advance Asset Management has launched Advance Tradewinds Global Equities, a vehicle for this market providing access to Los Angeles-based global shares fund manager Tradewinds. (Tradewinds has been a component of Advance's multi-manager international share funds Advance Wholesale International Shares Multi-Blend and Advance International Shares Multi-Blend since May 2006, and currently has a 10.0 percent allocation.)
Tradewinds will invest the Advance-sourced monies in 40 – 70 large-cap world shares, primarily from the developed markets, although up to 25.0 percent of the portfolio can also be in companies from the emerging markets. The manager seeks undervalued stocks which possess attractive valuations and the potential for price appreciation on the basis of franchise quality and competitive industry position. The Advance mandate will be run by Tradewinds' Chief Investment Officer, David Iben, who has 27 years' investment management experience.
The establishment portfolio's 10 largest stockholdings included Anglogold Ashanti; Canadian gold miner Barrick; US wireless telecommunications provider Sprint Nextel; and Shell. The largest sector weightings at 30 June 2008 were to Industrial Materials (26.66 percent), Consumer Staples (11.68 percent), and Telecommunications (11.22 percent), while the principal geographical allocations were to the United States (30.85 percent), Japan (16.93 percent), the United Kingdom (9.63 percent), and Canada (8.14 percent). The mandate does include provision to invest in Australian companies, which accounted for 2.90 percent of portfolio value at 30 June 2008.
Advance is charging a 1.10 percent per annum ongoing fee, which makes access to Tradewinds pretty much dead-on the average ongoing fee for wholesale world large-cap share investment trusts (currently 1.11 percent). No performance fee is being charged, and there is provision for currency hedging.
Latest analysis by Morningstar US fund analyst Bill Rocco of Nuveen Tradewinds International Value A described the fund as a good long-term holding and "unlikely to ever get lost in the foreign large value crowd", but also cautioned that "its issue, sector, and market concentration will cause problems from time to time".
AMP Capital adds to Capital domestic equities team
AMP Capital Investors has hired Hamish Carlisle as a Senior Portfolio Manager/Analyst for the firm's Capital domestic equities team. Carlisle, who'll focus on banking stocks, has worked previously in banking stock research at Merrill Lynch Equities and in the merger and acquisitions team at National Australia Bank. Most recently, he was Managing Director of QuickDirect Online Mortgages.
Carlisle will contribute stock ideas to funds such as AMP Capital Equity A and AMP FLI – AMP Equity. The Capital team has been headed by Gary Armor since the departures of John Whiteman and Mike Cowin a year ago. At that time, we downgraded our Morningstar Recommendation to 'Investment Grade', noting that the departures deprived AMP of seniority, experience, and stability of tenure relative to competitors. Our fund research analysts are currently working on an updated assessment of the Capital approach, to be published in coming months.
Perennial hires global property fund manager
Perennial Real Estate, the property funds management business headed by Stephen Hayes, has hired Jordan Sherman as a Portfolio Manager, replacing David Carlisle.
Sherman will work out of the firm's New York office with Andrew Calderwood and Dennis Maloney, running funds including Perennial Global Property Wholesale and Perennial Global Property Securities. Sherman's 20 years' investing experience includes property investment roles at Satellite Asset Management, Orme Capital, Morgan Stanley, and Goldman Sachs.
Perennial Real Estate is currently our top-rated global property fund manager – in our most recent report, we described it as "a force to be reckoned with" – and has a Morningstar Recommendation of 'Highly Recommended'.
Portfolio Partners rebrands, adjusts fund mandates
Australia will have another fund manager whose name begins with 'A' at the end of September, as Portfolio Partners rebrands to 'Aviva Investors Australia'. (The Australian funds management industry is, to borrow from Sesame Street, frequently brought to you by the letter 'A': 1,986 or nearly 20.0 percent of the 10,972 active funds on our database start with A.)
The fund manager is also making changes to a number of funds' mandates. The maximum cash allocations for what will become Aviva Investors Prof Australian Equities and Aviva Investors Prof Dividend Builder are being reduced from 20.0 to 10.0 percent. For the Elite Opportunities funds, typical tracking error is being reduced from a current maximum of nine percent per annum to four to seven percent; the maximum number of companies is being reduced from 30 to 25; and the maximum cash allocation from 20.0 to five percent.
Additionally, the global bond component of Aviva Investors Prof Premier Fixed Income is being moved from index to active management by a related Aviva funds management business, and the fund's designated global bond index benchmark is changing from 25.0 percent JP Morgan Global Government Bond Index to the same allocation to the Lehman Global Aggregate Index.
Finally, Aviva is making a series of changes to Aviva Investors Prof Sustainable Investment (formerly Portfolio Partners Long/Short Sustainability), run by Andrew Hamilton since Amanda McCluskey's departure for AMP in June last year. The fund's benchmark is being changed from the 300 to the 200 S&P/ASX Accumulation Index; the manager is removing the ability to take short positions (which can currently go up to 50.0 percent of net assets); removing the performance fee (not exactly a common occurrence in the Australian funds management industry); and reducing the maximum cash weighting from 20.0 to 10.0 percent of portfolio value.
We will be changing the funds' names and other relevant information on our database and in our research reports on 29 September, which will flow through into Adviser Workstation, licensed datafeeds, our websites, and our newspaper managed funds tables. Table 1 below shows the existing fund names, their tickers, and their new names from 29 September.
Table 1: Portfolio Partners Funds Rebranding
|Existing Fund Name|| |
|New Fund Name|
|Portfolio Partners Pers Elite Opportunities Shares||12354||Aviva Investors Pers Elite Opportunities|
|Portfolio Partners Pers Emerging Shares||5895||Aviva Investors Pers Small Companies|
|Portfolio Partners Pers High Growth Shares||5852||Aviva Investors Pers High Growth Shares|
|Portfolio Partners Pers Income Plus Growth||4988||Aviva Investors Pers Income Plus Growth|
|Portfolio Partners Pers Listed Property||7048||Aviva Investors Pers Listed Property|
|Portfolio Partners Pers Shares||618||Aviva Investors Pers Shares|
|Portfolio Partners Prof Australian Equities||4522||Aviva Investors Prof Australian Equities|
|Portfolio Partners Prof Dividend Builder||13187||Aviva Investors Prof Dividend Builder|
|Portfolio Partners Prof Elite Opportunities||9391||Aviva Investors Prof Elite Opportunities|
|Portfolio Partners Prof Emerging Shares||5896||Aviva Investors Prof Small Companies|
|Portfolio Partners Prof High Growth Shares||5851||Aviva Investors Prof High Growth Shares|
|Portfolio Partners Prof High Yield||15143||Aviva Investors Prof High Yield|
|Portfolio Partners Prof Income Plus Growth||5898||Aviva Investors Prof Income Plus Growth|
|Portfolio Partners Prof Listed Property||7050||Aviva Investors Prof Listed Property|
|Portfolio Partners Prof Long/Short Sustainability||14340||Aviva Investors Prof Sustainable Investment|
|Portfolio Partners Prof Premier Fixed Income||7049||Aviva Investors Prof Premier Fixed Income|
|Portfolio Partners Prof Shares||5900||Aviva Investors Prof Australian Shares|
|Portfolio Partners Wholesale Emerging Shares||4578||Aviva Investors Wholesale Small Companies|