Former M&G manager Mike Riddell was announced as a new hire by Allianz Global Investors while Old Mutual Global Investors laid out plans for a new fund for one its own recent hires this week. 
Keeping on top of all the fund manager moves and launches can be a chore, so we’ve collected some of the biggest news stories of the past week in this handy digest.
Allianz Global Investors hires Mike Riddell
Former M&G bond manager Mike Riddel (pictured) is to join Allianz Global Investors next month as the group expands its European fixed income capability.
Riddell, who will join the firm on 1 October, has been appointed as UK fixed income portfolio manager and will report to Mauro Vittorangeli, chief investment officer for conviction fixed income at Allianz Global Investors.
Franck Dixmier, global head of fixed income at Allianz Global Investors, said: “Allianz Global Investors has a fixed income heritage stretching back many decades. Creating a dedicated footprint in the UK, one of the world’s most important and outward-looking financial markets, will perfectly complement our existing eurozone expertise, giving our clients access to a one-stop shop for European fixed income.”
“Mike joins us at an exciting time for our fixed income business, and I am sure that his deep experience of both UK and global fixed income markets will play a central role in building this new pillar in our international fixed income capability. Hiring such a senior, experienced fixed income practitioner as Mike underlines our ambition for our bond business in the UK.”
While at M&G, Riddell ran the M&G Index Linked Bond, Gilt and Fixed Interest Income and Global Government Bond funds. Over the past five years, the manager has outperformed his peer group composite with a 27.52 per cent return.
Performance of manager vs peers over 5yrs
Source: FE Analytics
OMGI to launch bond fund for Oxley
Old Mutual Global Investors plans to launch the Old Mutual Absolute Return Government Bond fund in coming weeks for Russ Oxley and his team, who joined the firm from Ignis Asset Management earlier this year.
The fund, which will launch on 7 October with £100m in seed capital, will target positive total returns on a rolling 12-month basis with stable levels of volatility uncorrelated to bond and equity market conditions. It will aim for returns of overnight cash plus 5 per cent.
Oxley and his team previously managed the Ignis Absolute Return Government Bond fund, which returned 14.21 per cent over their time on the portfolio when its Euro OverNight Index Average benchmark made a loss.
Performance of fund vs index over manager tenure
Source: FE Analytics
Adam Purzitsky, a co-manager on Old Mutual Absolute Return Government Bond, said: “Our investment philosophy hinges on the belief that, through a detailed understanding of forward interest rates, it is possible to express views on macro trends in a very precise way. Through our approach to investing, we are able to target specific risks and opportunities, without ‘inadvertently’ taking economic exposures to those risks we would rather avoid.”
“At the core of our approach is the understanding that forward rates are influenced by very different factors depending on their location on the curve. We believe we have the potential to deliver positive returns for investors within clearly defined volatility parameters irrespective of the direction of interest rates. Our investment track record of successfully managing these strategies is clear evidence that our process if very effective.”
Fidelity slashes tracker fees
Fidelity Worldwide Investment has reduced the cost of four of its index trackers as fees in the passive investing space continue to tumble downwards.
The group will lower the ongoing charges of its UK, US, Emerging Markets and World index funds for users of its FundsNetwork adviser platform and certain wholesale clients. The UK fund will remain the cheapest, with charges of just 0.06 per cent.
However, fees on its Europe ex UK, Japan, and Pacific ex Japan index trackers will remain at their current levels as they are already lower or in-line with the prices of their main rivals.
Ben Waterhouse, head of UK retail sales at Fidelity, said: “Since we lowered the cost of the range last May to become the lowest cost provider in the UK, assets under management in these funds have doubled. This growth provides us with the opportunity to once again reduce fees for the benefit of our clients.”
Yellen suggests 2015 rate rise is still on the cards
Despite the Federal Reserve failing to hike interest rates at its September monetary policy meeting, chair Janet Yellen hinted that the central bank could still make the move later this year.
At a speech in Massachusetts, Yellen repeated her outlook that conditions will be right for the Fed to move rates off their historic lows by the end of the year – while conceding that economic surprises could disrupt this strategy.
“I anticipate that it will likely be appropriate to raise the target range for the federal funds rate sometime later this year and to continue boosting short-term rates at a gradual pace thereafter as the labour market improves further and inflation moves back to our 2 per cent objective,” she said.
Mark Holman, chief executive of TwentyFour Asset Management, says the comments are “certainly” active forward guidance towards an October or December rate increase. The market seems to favour the latter month of the month, he added.
“Our own view is that the ‘surprise’ is more likely to come from financial markets than from the US economic data, so the Fed could be held back from hiking by market volatility. This can definitely not be ruled out, especially with the EM currency volatility that we’re seeing at the moment,” he said.
“However, should there be a period of relative calm in the next four weeks ahead of the October meeting, we should equally not discount the Fed taking the opportunity to hike while they can.”
