ING cuts American Funds loose as fixed-income subadviser
Will bring in its own team as replacement; another loss for giant fund firm
The hits keep coming for American Funds.
ING Investment Management Co. LLC has filed with the Securities and Exchange Commission to remove Capital Research and Management Co., American Funds’ parent company, as the subadviser of the $460 million ING American Funds Bond Portfolio Ticker:(IABPX), pending shareholder approval.
ING will replace American Funds with its own fixed-income team, led by its chief investment officer for fixed-income, Christine Hurtsellers. Ms. Hurtsellers, along with co-portfolio managers Matthew Toms and Michael Mata, manage the $821 million ING Intermediate Bond Portfolio Ticker:(IIBAX). It has the same investment objective as the ING American Funds Bond Portfolio and has outperformed it over the trailing-one- and three-year periods.
The ING Intermediate Bond Portfolio has a three-year annualized return of 11.77%, which ranks it in the top 25th percentile of all intermediate-term-bond funds. The ING American Funds Bond Portfolio has an annualized return of 8.4% over the same time period.
Chuck Freadhoff, spokesman for American Funds, said the firm does not comment on client decisions. Joseph Loparco, spokesman for ING, did not immediately return calls for comment.
While a $460 million mandate is a small drop in the bucket compared with American Funds’ $919 billion in mutual fund assets, it’s the latest in a long line of losses for the giant fund firm. It’s been nearly three years since American Funds had net inflows on a monthly basis. During the first quarter of 2012, investors pulled another $16 billion out of the funds, according to Morningstar Inc.
American Funds is looking for new ways to reach out to investors, though the company has said it’s not a reaction to the outflows.
The firm’s investment professionals will soon be making their way to YouTube to give American Funds another communication channel to reach investors. American Funds also recently launched a Facebook page. It has 1,234 likes so far.
Learn more about reprints and licensing for this article.
