American Express Gets Dynamic Ideas to Enhance Fund Management

August 13, 2002 ( - American Express has once again dipped into the Boston-area pool of investment talent to beef up its product lineup.

The Minneapolis-based firm announced it had acquired Dynamic Ideas LLC, a small quantitative analysis outfit based in Cambridge, Mass., according to a statement, the Wall Street Journal reported.

Officials said the Dynamic Ideas managers would run the domestic part of the $1.2-billion AXP Managed Allocation fund as well as trying to bolster tax and trading efficiency on other Amex funds and separately managed accounts.

Acquiring the Cambridge firm is the most recent attempt to give its fund family a jolt of energy with an infusion of outside talent.  

Fidelity Talent Raid

Earlier this year American Express lured away three Fidelity Investments managers to run an Amex Boston operation ( Fidelity Trio Lured to Amex ).

A few months later, Amex said it was moving chunks of business from other trading centers to the Boston location. Starting in April, two of its mutual funds and three of its variable annuity portfolios were based in Boston.

All together, portfolios with assets of about $12 billion have been turned over to the Boston office (See Boston AMEX Office Kicks off Portfolio Management )

Last month the firm revealed plans to hire up to a dozen new portfolio managers and analysts to fill out its New York, San Diego, and Boston offices, as well as new chiefs for its investment department.

Upgrades should cheer fund shareholders, most of which have trailed their competitors.  In the ten years ending June 30, seven out of ten of the firm’s stock and bond funds trailed their average peer, according to Morningstar data.

 Despite the funds’ anemic returns, AmEx was the nation’s 13th largest mutual-fund outfit with more than $64 billion in its retail stock and bond funds at the end of June, according to Boston fund consultant Financial Research Corp.