American Beacon Fund liquidations and reopening of a fund to new investors

TheShadow

http://www.sec.gov/Archives/edgar/data/809593/000080959315000072/amrtipsretearneststephens.htm


Too long to post, but here are the funds:


To be liquidated: AMR Class shares of the American Beacon Balanced Fund, American Beacon International Equity Fund, American Beacon Large Cap Value Fund, American Beacon Mid-Cap Value Fund and American Beacon Small Cap Value Fund,
(the A, C, and Y Class shares of the )American Beacon Treasury Inflation Protected Securities Fund, American Beacon Earnest Partners Emerging Markets Equity Fund; and

Reopening: American Beacon Stephens Small Cap Growth Fund

David_Snowball

They're struggling. American Beacon was American Airlines retirement system once upon a time. The share class that they're eliminating, AMR, points to the ticker symbol for American Airlines' parent company. American Beacon is eliminating most of their vanilla line-up in anticipation of significant year-end redemptions; I'm guessing that they've lost a major retirement contract - maybe with American? - and are scrambling to regain their footing.

David

msf

I notice that American Beacon Advisors (the management company) was acquired by Astro AB on April 30th. (Technically, American Beacon's grandparent company was acquired by Astro AB's two parent companies.)

I wonder if that could have precipitated AMR's leaving American Beacon.

Here's a thread from last month about American Beacon fund closings (not just AMR share class, but entire funds), also after April 30th:
http://www.mutualfundobserver.com/discuss/discussion/23172/american-beacon-funds-to-liquidate-several-funds

ibartman

September 11, 2015. The retirement savings plans are in flux at American Airlines

Fallout from American/USAir merger?

See links/below.

LINK: http://www.advisorllp.com/company-benefits/american-airlines/

In the coming weeks, according to American Airlines, the current American Airlines $uper $aver 401(k) Plan will be renamed the American Airlines, Inc. 401(k) Plan. Employee accounts from the US Airways Employee Savings Plan will also begin merging into the new Plan. This includes legacy US Airways flight attendant and non-contract employee accounts. Accounts for the legacy US Airways groups that have not reached joint ratified contracts will, for now, remain in the Employee Savings Plan.

Pilot accounts in the legacy American $uper $aver, and the legacy US Airways 401(k) Plan for Pilots and Future Care plans will move to a new American Airlines, Inc. 401(k) Plan for Pilots. The legacy Retirement Savings Plan for Pilots of US Airways, Inc. will remain separate at this time, however, upon the effective date of the new Pilot 401(k) Plan, the company contribution for these pilots will be made to the new Pilot 401(k) Plan.

The new Plan accounts are composed of a core account and an optional BrokerageLink® account.

AFS manages our clients’ 401(k) accounts using the BrokerageLink® option. As an institutional level adviser, we have access to more funds and ETFs (about 20,000) as well as more cost efficient share classes than normal retail BrokerageLink® accounts. We have also negotiated with Fidelity, the plan custodian, and have been able to reduce transaction fees by 67% (as compared to retail accounts) for mutual funds that charge them.

http://www.pionline.com/article/20141027/ONLINE/141029880/american-airlines-picks-fidelity-as-sole-provider-for-401k-plans

American Airlines Inc., Fort Worth, Texas, hired Fidelity Investments as sole provider for its 401(k) plans, starting in mid-2015, said Elise R. Eberwein, executive vice president, people and communications, for American Airlines, in an e-mail...[more]

http://www.benefitspro.com/2014/10/28/fidelity-wins-americans-401k-plan

Fidelity Investments will assume the responsibility for American Airlines’ 401(k) participants beginning in the middle of 2015.

The new relationship comes on the heels of the American and US Airways merger, announced in December of 2013. Fidelity has provided retirement services to US Airways since 1993.... [more]

VintageFreak

I am worried about my BRLVX and rethinking investment in BRLGX (expected to move to AB)

Old_Skeet

Hi @VF,

I hold BWLAX and was thinking about revisiting and reviewing this myself. Since, I use a sleeve management system and BWLAX is one of six funds held within the sleeve then should it falter I have the other five funds within the sleeve that can offer production and continue to propel the sleeve as a whole. This might not be as critical for me as it might be for others to decided what they should do. I am going to give this some time and see what comes of it. Perhaps with a smaller asset base it will become more nible and be able to easier adjust to varrying market conditions.

With this, I am going to stick around a while longer but keep it under review. Should its net asset value decline to the value at the time of my invstment I'll be letting it go.

Old_Skeet

msf

@ibartman - thanks for the links. The second one says that Fidelity was the record keeper for USAirways while JPMorgan Retirement Plan Services was the record keeper for AA.

I'd seen the latter as the major owner of AMR shares when I looked through the American Beacon SAI. That is, JPMorgan was investing the plan assets in American Beacon funds.

Technically, what that means is that just because the bookkeeper for the plan is changing, the investments don't have to change. Pragmatically, it sounds like a done deal that Fidelity will move the plan out of American Beacon funds.

TheShadow

The fund that is reopening is the American Beacon Stephens Small Cap Growth Fund, which was closed to new investors, subject to certain exceptions on September 16, 2013 and February 14, 2014. Effective September 22, 2015, the Fund will resume offering shares to new investors in accordance with the "Fund Summary-Purchase and Sale of Fund Shares" on page 16 and "Purchase and Redemption of Shares-Eligibility" on page 33.

VintageFreak

@Old Skeet. I like to keep standbys to my funds holdings in mind, since I (finally!) am managing to not get married to my funds like when I used to have hair.

I think instead of owning BRLVX and BRLGX just buy a Large Blend fund. I'm going to go hunting. If you have any tips...?

ibartman

VDIGX (Vanguard Dividend Growth Fund)?