Managerial shake-up at Artio Funds...reason to be concerned?

Comments

• VintageFreak

  March 2012 edited March 2012

  My thoughts on these things are always sell first and ask questions later. Of course it is easy for me because I do aggressive accounting and make sure and gains/losses can I offset against each other, and in your case, you are talking tax deferred accounts. Just look at what's happening at Nuveen. Better take matters into your own hands instead of taking a chance. At the very minimum, such things are distractions for the fund managers. Chances are high nothing good will come out of it.
  
  The other reason I still say sell is because I don't think there is necessarily anything unique about Artio. You can easily find satisfactory replacements elsewhere. Nothing is sure in this world and you never know how the funds would perform down the road with or without management shakeup, and same for the funds you would move into otherwise.
  
  Best.
• msf

  March 2012 edited March 2012

  Artio funds generally invest heavily in emerging market countries, notably those in central and eastern Europe. That's very difficult to find in other broad foreign funds. You can, of course, roll your own - there are now several funds focused on eastern Europe. But if you don't want to keep juggling your own portfolio's allocations and feel that you're paying a manager to manage (allocate), then there are few similar funds.
  
  I did a quick search to see how many large cap foreign funds had at least 25% emerging market exposure. Just 27. (Two of these were Artio Int'l Equity I and II, with 8-10% emerging Europe, and also some Africa/Middle East exposure.)
  
  Of the other 25, ASTON/Neptune Int'l has even higher EM exposure (including 11.5% emerging Europe, but no Africa/Middle East), and Nuveen Int'l Select also has even higher EM exposure (6% emerging Europe and almost that much in Africa/Middle East). Generally the others eschew emerging Europe, or at least have significantly less exposure.
  
  So Artio funds might be rather distinctive regarding their mix of regions (broad foreign funds tend to focus their EM exposure almost exclusively in Asia or Latin America). Mitigating this, however, is an interesting change to their prospectus. In the 2009 prospectus, they explicitly called out "investments in countries of Central and Eastern Europe and former states of the Soviet Union, including Russia" as a risk factor. That verbiage is missing from their current (2011) prospectus. Maybe they don't think this region is especially risky any more, or what's more likely, they're not as focused as they once were in the region. And that may argue for the idea that while these funds once were distinctive, they are much less so now.
• amateur

  March 2012

  Shostakovich commented he "recently read about the managerial shake-up at Artio...".
  
  This nearly 6 month old article was all I was able to find.
  
  http://www.4-traders.com/ARTIO-GLOBAL-INVESTORS-IN-5601068/news/ARTO-GLOB-Artio-Global-Investors-Inc-Announces-Organizational-Changes-13807080/
  
  Is there any other relevant information that could be a reason for concern?
• BobC

  March 2012

  I am unaware of any other (newer) information. As far as I know, things are status quo at Artio. We continue to use Total Return Bond JBGIX and U.S. Smallcap JSCIX in client portfolios and our research remains positive on the funds' management teams. We sold out of International Equity about three years ago, after having been with them for about 10 years. Artio is a good company.
• Ted

  March 2012 edited March 2012

  Dear Shostakovich : Citigroup's opinion of Artio Global Investors (ART). AUM is a very important number in the mutual fund world, and Artio redemption $$$ is on the up slope. If I were you, I'd cash in my chips, there's too many other excellent fund companies.
  Regards,
  Ted
  
• Shostakovich

  March 2012

  Ted,
  
  JPM's research team has noted the decline as well, and seems to have pulled back on the company. FWIW.