August 3, 2012

Top Portfolio Products: New Advisors In, AllianceBernstein Out for 3 Vanguard Funds

Henderson launches dividend, income builder fund; Intech announces new strategy

Portfolio Products logoNew products introduced over the last week include a new dividend and income builder fund from Henderson.

In addition, Vanguard changed advisors for three funds, and Intech announced a new eurozone strategy.

Here are the latest developments of interest to advisors:

1) Vanguard Announces Advisory Changes for 3 Funds; AllianceBernstein Out

Vanguard announced Thursday new investment advisory arrangements for Vanguard Windsor Fund (WNDX), Vanguard International Value Fund (VTRIX) and Vanguard Global Equity Fund (VHGEX), under which AllianceBernstein will no longer serve as an advisor. All three follow a multimanager approach. The funds’ board of trustees added new advisors to manage portions of two funds, and an existing advisor assumed greater responsibility for a portion of the third fund.

WNDX added a new advisor, Pzena Investment Management, which now oversees approximately 28% of the fund’s assets using a classic value investment approach. Wellington Management Co., which has served as an advisor since the fund’s inception in 1958, continues to manage the majority, approximately 71%. The remainder is in cash investments. Pzena portfolio managers Richard Pzena, John Goetz and Antonio DeSpirito have worked together since 1996.

ARGA Investment Management is the new advisor to VTRIX and now advises about 21% of its assets. ARGA invests in undervalued businesses globally under the portfolio manager Rama Krishna, who founded ARGA in 2010, and Steve Morrow. Krishna has more than 20 years of investment experience, most recently at Pzena, where he was a managing principal and portfolio manager. Morrow has more than 19 years of investment experience and has been with ARGA for two years.

Lazard Asset Management continues to manage about 29% of VTRIX, Edinburgh Partners approximately 28%, and Hansberger Global Investors about 19%. Cash investments account for the remainder.

An advisor to VHGEX since 2008, Baillie Gifford Overseas has assumed responsibility for an additional 13% of the fund under the portfolio managers Charles Plowden, Spencer Adair and Malcolm MacColl, and now manages about 19% of its assets. Marathon Asset Management continues to manage about 44%, and Acadian Asset Management about 33%. The remainder is in cash investments.

2) Henderson Global Investors Launches Henderson Dividend and Income Builder Fund

Henderson Global Investors (North America) announced Wednesday that it has launched the Henderson Dividend & Income Builder Fund (HDAVX, HDCVX, HDIVX). It will be managed by Alex Crooke, director of value and income; Job Curtis, head of value and income; Jenna Barnard, director of retail fixed income; and John Pattullo, head of retail fixed income.

The fund offers a global approach to income generation, seeking to provide a level of income that exceeds the average yield on global stocks and grows over time. It primarily invests in dividend-paying equities of U.S. and non-U.S. companies. A smaller allocation of its portfolio is invested in fixed-income securities, with the flexibility to invest across fixed-income sectors including high-yield and investment-grade corporate bonds and government bonds.

3) Intech Launches Eurozone Low Volatility Equity Strategy

Intech Investment Management announced recently the launch and funding of its Eurozone Low Volatility strategy, which seeks to generate modest above-market returns, gross of fees, over time, at a significantly lower level of absolute volatility and a higher Sharpe ratio. The new product is euro-denominated and benchmarked to the MSCI EMU (European Economic and Monetary Union) Index.

Intech also announced the client funding of its U.S. Low Volatility strategy, which was launched in October 2011. Like its Eurozone counterpart, the U.S. Low Volatility strategy seeks to generate a modest excess return above its benchmark, the Russell 1000 Index, gross of fees, with significantly lower absolute risk and a high Sharpe Ratio.

Read the July 27 Portfolio Products Roundup at AdvisorOne.

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