This week in portfolio products news, Neuberger Berman filed with the SEC for the introduction of two new mutual funds and J.P. Morgan added a new wrinkle to a bond fund. Also, Gemini Fund Services assisted in the launch of seven new alternative funds by independent advisors.
Neuberger Berman Files to Launch Two Funds
The Global Equity Fund will be managed by Benjamin Segal, managing director of Neuberger Berman Management and Neuberger Berman LLC. It seeks to reduce risk through diversification across many industries, and invests mainly in large-capitalization companies located anywhere in the world, including companies in both developed and emerging markets. Under normal market circumstances, the fund will invest at least 80% of its assets in equity securities.
The Global Thematic Opportunities Fund will be managed by Anthony Gleason, Alexandra (Sandy) Pomeroy, William Hunter, and Richard Levine. The portfolio managers identify companies through a two-step process that they believe to be attractively priced and that benefit from significant and underappreciated global trends. The first step involves identifying global themes through proprietary research, and the second identifies companies they believe will benefit from these themes. The portfolio managers believe this helps them choose companies whose stocks trade at a discount to their intrinsic value, thus presenting attractive long-term investment opportunities. The portfolio managers also model future cash flows to identify companies attractively priced relative to current cash flows.
J.P. Morgan Asset Management Reconfigures Bond Fund
A new twist marks a month-old mutual bond fund from J.P. Morgan Asset Management. The Tax Aware Income Opportunities Fund (JTAAX), co-managed by William Eigen and Rick Taormina, does some of the usual: it focuses 80% of its capital on tax-exempt municipal bonds. The twist comes in the other 20%, which is allocated for taxable bonds, credit derivatives and a suite of idiosyncratic hedges aimed at insulating the portfolio and juicing returns.
According to Eigen, head of absolute return and opportunistic fixed-income strategies for J.P. Morgan Asset Management, such a mix had not been tried earlier because yields on municipal bonds had been falling steadily for several years, pushing up the value of those assets. "[Muni] mutual funds haven't evolved because they haven't had to; you had to do nothing over the last 30 years but put your feet up and watch the returns roll in," he said.
Taormina, manager of municipal bonds at the firm, pointed out that now yields are at unprecedented low levels and risk premiums on many of the securities don't provide enough cushioning to withstand inflation and interest-rate increases. That 20% difference in this fund allows the flexibility to change exposure and evade volatility.
Gemini Fund Services Helps Launch Seven New Alternative Funds
As a partner to independent advisors who want to launch alternative investment funds to cater to that interest among their high-net-worth clients, Gemini Fund Services, LLC announced Tuesday that in the first quarter of 2011, it has overseen the launch of seven such new funds.
“Gemini partners with advisors to develop the investment product that meets their specific vision and needs, drawing on years of industry knowledge and insight to find creative solutions at the best cost,” said Andrew Rogers, president of Gemini Fund Services. “We are very pleased to help launch these funds and enable more advisors to compete in an increasingly costly and regulated environment.”