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September 16, 2011 at 02:43 PM
New products introduced over the last week include a new currency enhanced fund from Merk and a new investment-grade corporate bond product from Invesco PowerShares. Meanwhile, Goldman Sachs closed its Global Alpha hedge fund, Fidelity offered new searchable fixed-income research, and S&P said it will soon present its second annual mutual fund excellence awards.
1) Merk Launches Currency Enhanced U.S. Equity Fund
Merk Investments announced the launch of the Merk Currency Enhanced U.S. Equity Fund (MUSFX) on Sept. 12. The no-load mutual fund seeks to outperform the S&P 500 Index by managing the U.S. dollar and other currency exposures inherent in U.S. equity investments.
The fund employs a currency overlay on top of the S&P Index, seeking to improve risk-adjusted equity returns. Currency exposure allocations for the fund will be determined based on quantitative and qualitative analysis. Through the use of currency forward contracts, the fund applies the currency overlay while concurrently providing investment exposure to the S&P 500.
2) Invesco PowerShares Expands Fixed Income Line With High-Grade Corporate Bond Portfolio
Invesco PowerShares Capital Management LLC announced Sept. 12 that the PowerShares Fundamental Investment Grade Corporate Bond Portfolio (PFIG) was to begin trading on Sept. 15. The fund is the first investment grade corporate bond ETF to use Research Affiliates’ Fundamental Index methodology, and provides investors access to maturities ranging from 1-10 years.
PFIG is based on the RAFI Investment Grade Corporate Bond Index. The fund will normally invest at least 80% of its total assets in the securities that comprise the index, which is comprised of U.S. dollar-denominated bonds registered for sale in the U.S. whose issuers are public companies listed on a major U.S. stock exchange.
Only securities rated BBB/Baa or higher by both Moody’s and S&P, with greater than one year to maturity, qualify for inclusion in the index. PFIG is expected to issue monthly distributions.
3) Goldman Closes Global Alpha
Goldman Sachs says it is shutting its $1.6 billion Global Alpha funds, according to reports on Sept. 15, one day after it announced a management shake-up at the fund. The fund, once the pride of its quantitative trading business, will be closed in the next few weeks.
Global Alpha fell about 13% through early September. This was the second time in four years that the hedge fund suffered big losses; it fell about 22.5% in August 2007, according to a Reuters report. It gained 4% in 2008 and 30% in 2009.
At its peak, the fund had some $12 billion in assets at its peak over the past four years.
There is now some speculation that Goldman Sachs may not exit the quantitative hedge fund business, though it still manages billions in quantitative mutual funds.
The average quant fund is down less than 1% through early September, according to Hedge Fund Research Inc.
