Investment Product and Service Launches

American Beacon Advisors creates mutual fund with multi-asset program and Vanguard closes million-dollar securities fund to new clients. 

Art by Jackson Epstein

Art by Jackson Epstein

American Beacon Advisors Creates Mutual Fund with Multi-Asset Program

American Beacon Advisors, Inc. announced the launch of the American Beacon AHL TargetRisk Fund, a newly organized mutual fund based on the existing Man AHL TargetRisk multi-asset program. The fund’s shares became available on December 31.

According to the firm, the American Beacon AHL TargetRisk Fund aims to provide capital growth with a balanced, long-only approach, active risk management, and diversification across a broad range of markets. Its proprietary quantitative approach seeks to provide an excess return with a stable level of volatility, regardless of market conditions. The fund allocates its assets across equities, bonds, interest rates, corporate credit, and commodities, investing primarily in derivatives vehicles. The fund’s sub-adviser is the London-based AHL Partners LLP (Man AHL), a wholly owned subsidiary of Man Group plc (Man Group), a global active investment management firm and one of the largest publicly listed global hedge fund providers.

“We’re thrilled to partner again with Man AHL to bring this new Fund to market,” says Gene Needles, American Beacon’s chairman and chief executive officer. “We believe the launch of this strategy as a U.S. ‘40 Act vehicle is timely. By design, this fund is adaptive and capable of dynamically maneuvering through various market environments, potentially making it an attractive solution for investors seeking to diversify their portfolios as the U.S. bull market ages.”

The American Beacon AHL TargetRisk Fund is the second American Beacon fund to be sub-advised by Man AHL, which also sub-advises the American Beacon AHL Managed Futures Strategy Fund (Institutional Class, AHLIX; Investor Class, AHLPX).

Vanguard Closes Million-Dollar Securities Fund to New Clients

In advance of a planned liquidation coming in late March, Vanguard has closed its $962.5 million Vanguard Convertible Securities Fund to new investors.

Shareholders of the fund are being notified and have the opportunity to exchange into another Vanguard fund or redeem shares prior to the liquidation date, at which time the fund’s assets will be sold and the proceeds distributed. 

According to the company, Vanguard determined that investors could achieve similar risk-return exposures and long-term returns by investing in a diversified, balanced portfolio of global stock and bond funds.

Vanguard introduced the fund in 1986, primarily for pension funds, endowments, and corporate and non-profit retirement plans. Despite the fund’s capable adviser and prudent approach to managing convertible securities, the fund has not gained broad acceptance among these investors and remains one of the smallest offerings in terms of net assets among Vanguard’s stock and balanced offerings.

The liquidation is a result of Vanguard’s review of its global fund and exchange-traded fund (ETF) line-up. “We are adding new products that have investment merit and investor demand, changing advisers and mandates to improve investor outcomes, and eliminating funds that lack a distinct role or strong investment case,” says Matthew Brancato, head of Vanguard’s Portfolio Review Department, who noted that the company recently introduced two environmental, social and governance (ESG) exchange-traded funds (ETFs) and announced the merger of two equity funds.