Products May 12, 2009

Turner Launches Fund with Access to Long/Short Strategies

Turner Investment Partners announced the launch of the Turner Spectrum Fund, a no-load, open-end mutual fund.
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The fund seeks capital appreciation by investing in six long/short equity strategies managed by the firm, according to a news release. The Turner Spectrum Fund will seek to capture alpha, reduce volatility, and preserve capital in declining markets by investing in the following long/short strategies, each managed by a separate portfolio management team at Turner:

  • Turner Market Neutral strategy, directed by Robert Turner, lead portfolio manager, investing in stocks in all stock market sectors, with a typical allocation resulting in a market-neutral net exposure;
  • Turner Long/Short Equity strategy, directed by Christopher McHugh, lead portfolio manager, investing in stocks in all stock-market sectors, with a focus on mid-sized and large companies globally;
  • Turner Select Opportunities strategy, directed by Frank Sustersic, lead portfolio manager, investing primarily in small-cap stocks across all sectors;
  • Turner Global Medical Sciences strategy, directed by Vijay Shankaran, lead portfolio manager, investing primarily in health-care stocks in global markets;
  • Turner Global Financial Services strategy, directed by David Honold Jr., lead portfolio manager, investing primarily in financial stocks in global markets;
  • Turner Global Consumer strategy, directed by Jason Schrotberger, lead portfolio manager, investing primarily in consumer-discretionary and consumer-staples stocks in global markets.

Although each strategy’s weighting in the fund will vary as a result of performance, Turner intends to rebalance each weighting equally at the end of every year, the company said.

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The Institutional Class Shares (TSPEX) of the Turner Spectrum Fund will require a minimum initial investment of $100,000, with an expense ratio initially capped at 1.95%. The Investor Class Shares (TSPCX) will be available with a minimum initial investment of $2,500 and an expense ratio initially capped at 2.20%.

The Turner Spectrum Fund will not charge investors a performance fee.

More information is available at www.turnerinvestments.com.

 

The Markets May 12, 2009

Providers Scutinizing Target-Date Funds More Closely

A survey from Callan suggests managers of target-date funds have stepped up examinations of their offerings due to the economic downturn.
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The study, published by the Callan Investments Institute, surveyed 30 fund managers in March. Callan found that the majority of providers (53.3%) evaluate their glide paths annually, and 23.3% do so quarterly. However, due to recent market events, 85% of fund managers examined their glide paths between October 2008 and March 2009, according to a Callan release about The 2009 Callan Target Date Fund Manager Survey.

Just more than a third (34.5%) of fund managers made changes as a result of the interim review. Some managers that did make adjustments reduced the aggressiveness of the glide path, while others chose to improve diversification, Callan said.

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“The majority of target-date fund managers are avoiding a knee-jerk reaction to the market crisis,” said Lucas, in the relesase. “They continue to examine the situation closely, but are being measured in their response.”

Aside from altering the glide path, 54.5% of managers made other target-date fund changes within the past six months. The most common change was to underlying funds/managers employed in the target-date funds (61.1%).

“Target-date fund managers know they are going to be held accountable for performance by managers within their funds and many are being proactive about eliminating under performers,’ said Lucas.

Anatomy of Target-Date Funds

Target-date fund glide paths continue to vary widely in terms of equity exposure and shifts in allocation over time across funds, according to Callan. However, variations are most profound in nearer-term funds.

Callan said equity allocations for 2010 funds in the survey sample range from more than 60% to less than 20%. Some later series’ target-date funds have equity exposure that is most conservative at retirement, while others will glide down well into retirement.

Variations in equity allocation and the use of asset classes can materially affect target-date fund performance, Callan noted. The worst performing 2010 fund in the sample lost 15.87% in the fourth quarter of 2008 and 34.48% for the year, while the best performing 2010 fund lost 6.20% and 12.92%, respectively.

Nearly 67% of managers reported that they take a strategic approach to asset allocation compared to 6% that take a tactical approach.

More information is available at www.callan.com.

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