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Rating:Three's Not a Crowd Not Rated 3.0 Email Routing List Email & Route  Print Print
Tuesday, February 13, 2001

Three's Not a Crowd

Reported by Alfred Wang

The more, the merrier at American Express Financial's new small cap growth fund, as subadvisory responsibilities were divided up equally among RS Investment Management, INVESCO, and Neuberger Berman. American Express launched the new AXP Small Cap Growth Fund to fill out asset allocation models with a bottom-up investment approach that stands next to the quantitative investment strategy of the only other small cap product in place.

"Our funds are very style-pure and we're not going to chase performance at the expense of the fund's style," explained an American Express spokesperson.

Why is there a growing trend towards multiple subadvisors in one fund?

"Three heads are better than one," joked the spokesperson, but the reality is that there aren't enough fund managers to go around. Subadvisors can only manage a certain amount of money, so advisors are forced to spread the fund management responsibilities among different subadvisors, according to Peter Sundman, executive vice president in charge of mutual fund and institutional businesses at Neuberger Berman.

"But," he added, "our garden grows bigger if we grow it better."

The fund managers will be John H. Seabern and John L. Wallace from RSIM, Jennifer Silver and Michael Malouf from Neuberger Berman, and Stacie Cowell from INVESCO Funds Group. The new fund will have A, B, C, and Y class shares. All backoffice business will be handled in-house.


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