Causeway launches NextShares for flagship strategy
International value shop Causeway Capital Management is to launch the Causeway International Value NextShares, according to a Securities and Exchange Commission (SEC) filing.
The fund, which charges a 0.80% management fee, will use the same investment style as the $8.6 billion Causeway International Value mutual fund, which invests in undervalued companies that have low price-to-earnings ratios, high yield, low price-to-book value ratio, low price-to-cash flow ratio and financial strength.
It will also be managed by the same team of portfolio managers, which consists of Sarah H. Ketterer, Harry W. Hartford, James A. Doyle, Jonathan P. Eng, Conor Muldoon, Foster Corwith, Alessandro Valentini and Ellen Lee.
The Los Angeles, California-based firm, which managed $59 billion at the end of last year, first established the partnership with NextShares in December 2016.
First launched in February 2016, NextShares funds were created as another way to invest in actively-managed strategies besides ETFs and mutual funds.
Similar to ETFs, NextShares are issued and redeemed only in specified large aggregations and trade throughout the day on an exchange. Unlike actively-managed ETFs, NextShares are not required to disclose their full holdings on a daily basis.
The structure is the brainchild of Thomas Faust, chief executive of Eaton Vance, which also owns NextShares.
Franklin Templeton to merge two small-cap funds
Launched in 1991, the Templeton Foreign Smaller Companies fund has returned 41.6% over the past three years until the end of January and ranks 13 out of 21 International Small/Mid-Cap Core funds tracked by Citywire. It primarily invests in small-cap companies outside the US, including those in emerging markets.
Launched in 1981, the Templeton Global Smaller Companies fund has returned 39.8% over the past three years until the end of January and ranks 18 out of 29 Global Small-/Mid-Cap Funds tracked by Citywire. Unlike the Foreign fund, it invests in small-cap companies located anywhere in the world.
The merger is likely to result in potential cost savings for shareholders of the Foreign fund as the total annual fund operating expense for the foreign fund is 1.88% whereas the global fund charges 1.39%.
According to the same filing, the Foreign fund has outperformed the Global fund, on a total return basis, for the one-year and three-year periods ended October 31 2017, returning 28.24% and 9.06% respectively, but the Global fund has outperformed the foreign fund for five-year and 10-year periods, returning 10.95% and 3.63% respectively.
The merged fund will have a global rather than international mandate.
A Franklin Templeton spokeswoman confirmed the contents of the filing but declined to comment further.