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American Century Makes Its Liquid Alts Move

By DailyAlts Staff American Century has been fairly quiet on the liquid alternatives front as the product category has experienced a boom since the 2008 financial crisis. In 2011, the firm launched two “130/30” funds and a market-neutral fund, and it has been operating another equity market-neutral fund since 2005, but American Century has largely been on the sideline of the liquid alts movement. That is, until now. On February 3, American Century filed paperwork with the Securities and Exchange Commission (SEC) seeking approval for three new alternative mutual funds. The firm has also initiated a new brand for its alternatives business and filed to trademark the brand “AC Alternatives,” which is used on the new line of alternative mutual funds. The AC Alternatives Income Fund The AC Alternatives Income Fund’s stated objective is providing investors with “diverse sources of income.” In pursuit of this objective, the fund’s managers will combine several distinct strategies designed to capture current yield, while also seeking to protect inflation-adjusted purchasing power through capital appreciation. Some of the fund’s strategies and investments will include: Corporate credit strategies Structured credit strategies Real estate strategies MLP strategies Income-oriented equity strategies The fund will also pursue PWP overlay strategies, which involve “exploiting market opportunities, managing inflows and outflows of fund assets and/or hedging against certain risks” identified by sub-advisor PWP. Arrowpoint Partners and Good Hill Partners are also listed as sub-advisors to the fund, but according to the prospectus, PWP “may make recommendations to the advisor to terminate and replace underlying sub-advisors from time to time.” The AC Alternatives Equity Fund The AC Alternatives Equity Fund will employ several equity strategies, with low correlation to one another and the broad market, in pursuit of capital appreciation. As with the AC Alternatives Income Fund, PWP is a sub-advisor and PWP overlay strategies are among the equity strategies that will be utilized by the AC Alternatives Equity Fund. Other strategies include: Long-only Long/short Event driven Trading oriented strategies In addition to the overlay strategies, PWP will also sub-advise the fund’s event driven and trading strategies, while Passport Capital will sub-advise its long/short equity strategies. The AC Alternatives Multi-Strategy Fund Finally, the AC Alternatives Multi-Strategy Fund will pursue four distinct strategies managed by four different sub-advisors, as well as four additional strategies sub-advised by PWP. The strategies, which span asset classes, are listed below with their sub-advisors in parenthesis: Long/short credit (Good Hill Partners) Long/short credit (MAST Capital) Event driven (Levin Capital) Long/short equity (Passport Capital) Overlay (PWP) Global macro (PWP) Real assets (PWP) Trading strategies (PWP) American Century’s Existing Alts The three new alternative mutual funds will join American Century’s current lineup of liquid alts, which include a pair of “130/30” funds (arguably not an alternative strategy since it has a beta of 1.0 to its benchmark) and a pair of market-neutral equity funds. The “130/30” funds, which average 130% long and 30% short equity exposure, have outperformed their long-only counterparts. The American Century Core Equity Plus Fund (MUTF: ACPVX ), with approximately $170 million in fund assets, has a five-star rating from Morningstar and generated a 14.99% return for the year ending January 30. The American Century Disciplined Growth Plus Fund (MUTF: ACDJX ), with approximately $33 million in fund assets, also has a five-star rating, and it generated an even better 20.21% return for the year ending January 30. The American Century Market Neutral Value Fund (MUTF: ACVVX ) launched at the same time as the two “130/30” funds and currently has approximately $76 million of fund assets. It has a four-star rating from Morningstar and generated a 3.31% return for the year ending January 30, which was still enough to rank it in the top 19% of its category. American Century’s oldest liquid alts product, the American Century Equity Market Neutral Fund (MUTF: ALHIX ), also has a four-star rating. It returned 2.07% for the year ending January 30 and currently has approximately $117 million of fund assets. For more information, visit americancentury.com .

NiSource (NI) Q4 2014 Results – Earnings Call Webcast

The following audio is from a conference call that will begin on February 18, 2015 at 09:00 AM ET. The audio will stream live while the call is active, and can be replayed upon its completion. Are you Bullish or Bearish on ? Bullish Bearish Neutral Results for ( ) Thanks for sharing your thoughts. Submit & View Results Skip to results » Share this article with a colleague

West Port Congestion To Hurt These ETFs

The slowdown at 29 West Coast cargo ports is getting worse with operations having been suspended yet again last weekend. This represents the second partial shutdown at these ports in a week and is the result of an escalating labor dispute with the dockworkers’ union. The International Longshore and Warehouse Union, representing 20,000 dockworkers, has been in negotiations for nine months with the Pacific Maritime Association, with no effective labor deal till now. It is estimated that the partial shutdown will result in a loss of billions of dollars in trade, especially with Asia, hampering trade of electronics, clothes, toys and car parts. Notably, the 29 ports handle nearly half of all U.S. maritime trade and more than 70% of imports from Asia, representing around $1 trillion of cargo a year (read: Is Cheap Oil Driving Transport Earnings and ETFs? ). The conflict is disrupting the supply chain of American exporters, automakers, manufacturers, farmers and retailers, and is taking a toll on consumer goods, food, clothing and other products. It is also leading to higher expenses in the form of additional airfreight cost and other transportation fees that will likely dilute the profit margins of companies. Additionally, the impact has also been felt in the transportation sector due to slower freight traffic by trucks and rails. The National Retail Federation warned that a full strike or lockout at the West Coast ports could cost the economy $2.1 billion a day. Last time, the shutdown of West Coast ports for a 10-day period in 2002 had cost the U.S. economy about $1 billion a day. The situation has placed the retailers, who have to ship their inventories abroad before the busy spring shopping season, in a quandary. The labor strife has put a pause on shipping and may cost retailers as much as $7 billion this year. Notably, the U.S. footwear retail industry, which solely depends on imports, seems in deep trouble (read: Should You Keep Holding the Retail ETFs? ). The agricultural industry is no way behind as exports have fallen as much as 50%. California’s citrus industry has already seen a 25% decline in its export business, losing about $500 million in sales according to the trade group California Citrus Mutual. The deadlock is further threatening the $2.4 billion citrus industry at a time when the demand for California citrus usually peaks. Further, the meat and poultry industry is losing more than $40 million per week, as per the North American Meat Institute. Even if the nine-month labor dispute is resolved, it could take a couple of months for the economy to return to normal. Given this, a number of industries could see further slowdown from this 29-port dispute, pushing down the stocks and ETFs in the coming months. Below, we have highlighted three funds that are in focus. Though these products have a Zacks ETF Rank of 3 or ‘Hold’ rating, these could see rough trading in the days ahead given the port gridlock. iShares U.S. Consumer Goods ETF (NYSEARCA: IYK ) This fund provides exposure to 115 stocks that are engaged in a wide range of consumer goods, including food, automobiles and household goods. It tracks the Dow Jones U.S. Consumer Goods Index and charges 43 bps in annual fees. The fund is highly concentrated on the top five firms with the largest allocation going to Procter & Gamble (NYSE: PG ) at 10.8%, followed by Coca-Cola (NYSE: KO ) and PepsiCo (NYSE: PEP ) with at least 7% share each. All the three firms have an unfavorable Zacks Rank #4 (Sell), suggesting their underperformance in the months to come (read: Coca Cola, PepsiCo Earnings Stir Up Consumer Staples ETFs ). From a sector look, food & beverage accounts for 48.1% while household & personal products, consumer durables and autos & components round off the next three spots with a double-digit allocation. The product has amassed $656.8 million in its asset base and trades in moderate volume of about 72,000 shares a day on average. The ETF is up 1.8% so far in the year. iShares Transportation Average ETF IYT) The ETF tracks the Dow Jones Transportation Average Index, giving investors exposure to a small basket of 20 securities. The product puts heavy focus on the top five firms at roughly 43.2% with the largest allocation going to FedEx (NYSE: FDX ) , Union Pacific (NYSE: UNP ) , and Kansas City Southern (NYSE: KSU ) . The three firms currently carry a Zacks Rank #3 (Hold). From a sector perspective, about half of the portfolio is dominated by railroads while the delivery service sector makes up for nearly 28% share. The fund has accumulated $1.7 billion in AUM while it sees a good trading volume of more than 515,000 shares a day on average. It charges 43 bps in annual fees and has lost over 1% so far this year. iPath DJ-UBS Livestock Total Return Sub-Index ETN (NYSEARCA: COW ) This note tracks the Dow Jones-UBS Livestock Subindex Total Return, which delivers returns through futures contracts on livestock commodities. The benchmark provides 69% exposure to live cattle and the remainder to lean hogs. The product charges 75 bps in fees per year and has amassed $23.9 million in its asset base. It trades in average volume of about 18,000 shares a day, suggesting additional cost in the form of a wide bid/ask spread. The ETN is down 12.1% in the year to date time frame. Bottom Line These products could underperform in the coming months given that the malaise from the West port bottleneck will likely persist even if the dispute is resolved. As a result, investors should stay away from these ETFs for now.