Products January 6, 2009

T. Rowe Adds Income Fund

T. Rowe Price has expanded its fixed-income investment offerings by launching the Strategic Income Fund, the company announced.
Reported by

The new offering seeks high income and some capital appreciation by investing in as many as 12 asset classes, including both U.S. and non-U.S. securities, the company said. At least 80% of its net assets will be invested in income-producing securities or other income-producing investments.

Individual investors can access the strategy through a no-load mutual fund or Advisor Class shares.

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According to a press release, by using T. Rowe Price’s credit research capabilities, the fund will employ a diversified approach to identifying opportunities across the globe. As much as 65% of the fund can be invested in noninvestment-grade securities and as much as 50% can be invested in non-U.S. dollar-denominated foreign debt securities.

Investments will include corporate bonds issued in the U.S. and abroad, high yield bonds and loans, mortgage-backed securities, commercial mortgage-backed securities, asset-backed securities, emerging market debt, convertible bonds, preferred stock, and government debt.

The portfolio’s weighted average maturity is expected to be between four and 15 years.

The fund’s management team is led by fixed-income veteran Steve Huber, who has more than 18 years of investment management experience.

The minimum initial investment in the Strategic Income Fund (PRSNX) and the Strategic Income Fund-Advisor Class (PRSAX) is $2,500 or $1,000 for retirement plans, gifts, or transfers to minors accounts.

The net expense ratio is estimated to be 0.80%.

Deals & People January 6, 2009

McCann Exits Merrill after Bank of America Takeover

Robert McCann, the vice chairman of the wealth management division at Merrill Lynch&Co. Inc., will be replaced by Dan Sontag, according to published reports.
Reported by

The announcement of McCann’s departure comes days after Bank of America Corp. officially acquired Merrill Lynch January 1 (see “Merrill Lynch Stockholders Approve BoA Deal’). When the leadership of the combined firm was announced in October, McCann was named as head of the combined financial adviser organization (see “Bank of America Fills Out Leadership Team’).

John Thain, president of Bank of America’s global banking securities and wealth management division (and former Merrill chief executive), delivered the news about McCann via an internal memo, according to published reports (see “Thain to Head Wealth Management at Bank of America’).

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McCann will be succeeded by Sontag, a deputy who oversees Merrill’s brokerage operations in the U.S. and Latin America, Bloomberg reported.

McCann helped craft a broker retention package unveiled in October, which was criticized by some for not rewarding lower-producing brokers (see “BoA, Merrill Retention Package Rewards Top Producers’).

McCann has been with the firm since 1982, briefly leaving in 2003, according to reports.

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