Executive Briefs

NEWS SCAN

Hedge Fund Buys Meridian Funds

One year after the "untimely" death of Richard Aster, founder of Larkspur, Calif.-based Aster Capital Investment Management, the investment advisor is selling off its assets.

Specifically, the Meridian Equity Income Fund (MEIFX), Meridian Growth Fund (MERDX) and the Meridian Value Fund (MVACX) are being sold to Arrowpoint AIM, a wholly-owned subsidiary of Denver-based hedge fund Arrowpoint Asset Management. The deal is expected to close in the third quarter of 2013.

 

Bank of America, Wells Fargo Fined Over Loan Funds

Bank of America Corp. and Wells Fargo & Co. were ordered to pay about $5.2 million in fines and restitution by the Financial Industry Regulatory Authority over sales of loan funds.

Brokers at units of the two banks recommended funds that invested in floating-rate debt to customers who weren't looking for risky deals, the industry-funded regulatory group said. Bank of America was fined $900,000 and ordered to reimburse $1.1 million in losses, while Wells Fargo was ordered to pay a $1.25 million fine and about $2 million in restitution.

 

ICI 'Pleased' With SEC's Money Fund Proposals

The Securities and Exchange Commission has unanimously agreed to propose reforms for money market funds to include requiring that all institutional prime money market funds operate with a floating net asset value, instead of the current stable NAV, or allow money funds to use a stable NAV, but requiring them to impose a 2% liquidity fee if the fund's weekly liquid asset level falls below 15% of total assets.

Paul Schott Stevens, president and chief executive officer of the Investment Company Institute, said that the ICI is "particularly pleased that the Commission recognized the effectiveness of liquidity fees and gates in addressing risks that might arise in a widespread crisis."

 

Schwab Platform Embraces Halal Fund

Azzad Asset Management is widening the distribution of one of its funds. The Falls Church, Va.-based firm said that its Wise Capital Fund (WISEX) is now available on Schwab OneSource.

The Wise Capital Fund invests in sukuk, or asset-backed Islamic bonds, as well as deposits and notes from Islamic banks that comply with specific socially responsible and halal financial guidelines. The fund was launched on April 1, 2010.

 

RESEARCH

Equity Funds Suffer Outflows

 

Total estimated inflows to long-term mutual funds were $1.48 billion for the week ended Wednesday, May 29, according to the Investment Company Institute.

Equity funds had estimated outflows of $1.0 billion for the week, compared to estimated inflows of $2.63 billion in the previous week.

 

ETFs Reach $2.14 Trillion

 

Exchange-traded funds gathered record net inflows of $107 billion through the end of May 2013, which is 31% higher than the $82 billion in net flows at this time in 2012, according to data from ETFGI.

These inflows have helped to push assets invested globally in ETFs and exchange-traded products to a new all-time high of $2.14 trillion.

 

Cerulli: Active ETFs Face Uphill Climb

Although many in the industry have tipped active exchange-traded funds as the breakthrough product of 2013, this may be wishful thinking, according to a new study by Cerulli Associates.

Yoon Ng, an associate director at Cerulli, said that while ETF sponsors do not expect a wave of growth in active products, this has not stopped them from developing the ETFs.

 

SMAs, Alts Poised for Growth

 

Separately managed accounts and alternative funds are poised for growth and fund firms need to be on top of their social media game to participate in the growing mutual fund space, according to a new report by Curian Capital.

SMA usage is poised to grow with advisors ranking them as the product they plan to increase their usage of the most this year. Alternative investments are a growing asset class as more than 30% of advisors said they currently have 10% or more of their assets under management allocated to alternative asset classes. And more than 31% of respondents said they plan to increase their use of alternative investments by 5% to 10% this year.

 

PRODUCTS

Calamos Unveils L/S Equity Fund

 

Calamos Investments last week officially unveiled its Calamos Long/Short Fund (CALSX; CCLSX; CILSX; CRLSX). Money Management Executive previously reported on the fund's launch.

The fund will take long and short positions in equity securities of large and mid-cap U.S. companies.

 

Alger Launches Growth Funds

 

Fred Alger Management has expanded its investment lineup by launching the Alger International Growth Fund (AIGIX) and the Alger Global Growth Fund (CHUSX).

The International Growth fund bets on non-U.S. developed markets, with the flexibility to invest in emerging markets and the Global Growth fund bets on international developed markets, emerging markets, and U.S. markets.

 

Deutsche Offers Infrastructure, Utilities ETFs

Deutsche Asset & Wealth Management has launched the db X-trackers Municipal Infrastructure Revenue Bond Fund (RVNU) and the db X-trackers Regulated Utilities Fund (UTLT). The exchange-traded funds are touted as the only ETFs on the market offering investors exposure to municipal infrastructure revenue bonds and regulated utilities.

 

 

ARRIVALS

Hancock Beefs Up Institutional Sales Unit

John Hancock Funds has added Christopher Fuschillo as a managing director on its institutional sales team in a new position, calling on analysts and gatekeepers at major broker-dealer firms. Fuschillo reports to Gary Bieda, a senior managing director, and is based in New York.

Previously, Fuschillo served as director, due diligence - Institutional Investment Services Group, with Lord, Abbett & Co. Prior to that, he spent 11 years with The Dreyfus Corporation as vice president, business development, in the separately managed account area, and in related roles.

 

OppFunds Unveils New President

 

OppenheimerFunds has promoted Art Steinmetz to president. He is currently executive vice president and chief investment officer, where he oversees all equity, fixed income and alternative investment capabilities including investment strategy, strategic planning and personnel.

Steinmetz continues to report to Bill Glavin, chairman and chief executive officer of OppenheimerFunds.

 

Hartford Funds Names Global Investment Chief

Hartford Funds has named Wellington Management Company's Nanette Abuhoff Jacobson as global investment strategist. She succeeds Jim Rullo, who will retire from Wellington Management at the end of June.

As global investment strategist, Jacobson will analyze and write about markets and investment opportunities for Hartford Funds' sales organization, the financial advisor community, and major broker-dealers and distributors, according to the firm.

 

 

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