Vanguard Gives AXA Rosenberg the Ax
Vanguard took more time and was more deliberate than many clients of AXA Rosenberg in deciding how to handle the subadvisor's belated revelation of a coding error in one of the computer models it uses to run money. Ultimately, however, Vanguard reached the same decision that other firms did sooner: It was time to part ways. Vanguard has fired quant manager AXA Rosenberg as a subadvisor of US-domiciled funds Vanguard Explorer, Vanguard U.S. Value and Vanguard Market Neutral. The remaining subadvisors of those funds will take up AXA's roughly $1.8 billion in assets for now, Vanguard said. AXA had been on the bubble since it disclosed in April 2010 that it had discovered and fixed a coding error the previous year without ever notifying clients. A computer programmer made a mistake in coding one of the firm's risk models in 2007, but it wasn't noticed until later, and AXA personnel failed to report the problem to senior management until months after it was discovered. Since then, heads have rolled--including that of co-founder Barr Rosenberg--ownership has changed, and organizational changes have been made.
Morningstar Europe had issued Standard ratings on four Rosenberg funds prior to this upheaval: AXA Rosenberg Japan, American, European and Asia Pacific ex-Japan. The funds were competent enough, but the inner workings of their quant model were not disclosed, performance across their suite of funds was underwhelming, and their retail investor education material was below average, limiting our confidence. We have placed those ratings Under Review on learning of the issue with coding and will update our view in due course.
Invesco Launches Lux-Based Latin American Equity Fund
Invesco has this week launched a Luxembourg-domiciled version of its UK-based Invesco Perpetual Latin American fund. Fund manager Dean Newman, who has run the UK-listed fund since its launch in November 1994, has taken charge of its new sibling. Over his tenure, the fund has underperformed its average peer in the Morningstar Latin American Equity category by 117 basis points annualised, while exhibiting higher volatility.
Gartmore Hires Head of Global Equities Research
Gartmore has appointed Nick Anderson as head of global equities research. Prior to his appointment, the roles of head of research and investment director had been held by Simon Melluish. Anderson is expected to join the firm in September and will report to Neil Rogan who heads the global equities desk. He will work alongside Rogan on the flagship Global Focus Fund, as well as the seven-strong global equities team. Anderson comes with over 20 years’ experience in the industry. He spent seven years at Insight Investments, where he was head of equity research, and he was head of pan-European research at Schroders prior to that.
RBC Continue Hiring Offensive
RBC Wealth Management, the wealth management arm of Royal Bank of Canada, has hired Guido Giammattei on its emerging markets equity team. Giammattei was previously at Rexiter Capital Management, where he ran a Latin American equity portfolio. He will report to Phil Langham, who heads the emerging markets desk, and will feed ideas into the newly launched RBC Emerging Markets fund.
Morningstar Qualitative Ratings and Reports Issued This Week
Morningstar issued new qualitative ratings and reports on a number of funds available to UK investors this week, including Gartmore MM Cautious, Gartmore MM Balanced, Gartmore MM Active, FF – European Larger Companies. Click here to see the full list.
