Plus, Fairholme's new fund bets big on MBIA, and more.
Vanguard has removed the redemption fees on its domestic tax-managed funds. Effective immediately, Vanguard Tax-Managed Balanced
The news comes as flows into tax-efficient ETFs following similar strategies, which can be bought and sold throughout the day and carry no redemption fees (but often require brokerage commissions), have steadily increased. Meanwhile, Vanguard's tax-managed funds have not been big draws recently even though they are very competitive with ETFs on price and tax efficiency.
All of the firms' tax-managed funds have had outflows in the trailing 12 months though March 31. Together, the firm's domestic tax-managed funds have more than $9 billion in assets.
One of the arguments in favor of the redemptions fees has been that they reduced shareholder moves in and out of the funds. Such activity can force managers to sell securities and realize capital gains. It's not clear what effect the redemption-fee cut will have on the funds' tax efficiency.
The firm said it's keeping in place the redemption fee on Vanguard Tax-Managed International
Vanguard also said it will eliminate Investor share classes for its tax-managed funds and make low-cost Admiral shares available for them. On May 13, 2011, it will change the Investor shares of Tax-Managed Balanced, International, and Small Cap into Admiral shares. Those funds didn't have Admiral shares before. The family also will convert the Investor shares of Tax-Managed Capital Appreciation and Tax-Managed Growth and Income into their lower-cost Admiral shares. All of the Admiral shares will have $10,000 minimum initial investments, down from $100,000.
TCW's Suvall Retires
TCW announced that Susan Suvall is retiring at the end of June. Diane Jaffee will take the helm of Suvall's TCW Value Opportunities
Suvall has endured a stretch of poor performance that has tarnished her longer-term record. Value Opportunities is up 6.21% annually through April 28, 2011, over the past 10 years, while the Russell Midcap Value Index has appreciated 8.9%. The fund has beaten the index by less than 1 percentage point per year since Suvall became a manager on Nov. 3, 1997.
Jaffee runs TCW Dividend Focus
Fairholme's New Fund Bets Big on MBIA
Bruce Berkowitz's newly launched Fairholme Allocation
Berkowitz has said the $200 million Allocation fund will regularly take concentrated positions that the $18 billion Fairholme Fund can't take because of fund regulations.
MBIA's shares surged earlier this month on news that Bank of America
The Allocation fund can also own small- and mid-cap stocks that won't move the needle much on the larger Fairholme fund. So far, the fund hasn't bought any such positions--all of the equity holdings in the Allocation fund are also owned by Fairholme Fund.
Top Equity Holdings
As of Feb. 28, the fund had 40% of assets in domestic equities, 18% in commercial paper, and 35% in Treasury bills or money market funds. The fund's most recent portfolio can be found here.
The value of many precious metals, such as gold and silver, has jumped this year as the value of the U.S. dollar (as measured against other major currencies) has fallen. But silver has appreciated a staggering 47% this year through April 27.
Despite that, several funds that have taken big stakes in the largest silver ETF on the market, iShares Silver Trust
Heaviest Owners of SLV
(Note: Many mutual funds that have large allocations to silver own silver bullion rather than a silver ETF. One prominent example is Permanent Portfolio
Former Star Bond Manager Barred From Industry
David Baldt, Morningstar's 1997 Fixed Income Manager of the Year, was found guilty of insider trading by an SEC administrative law judge. As part of his punishment, the former Schroder and Morgan Grenfell manager is barred from the investment advisor business.
Baldt improperly told family members to redeem their shares in a mutual fund he managed around that time, according to the SEC.
Baldt says he plans to appeal the decision and continues to deny he committed insider trading.
Some bond funds that Baldt was associated with were forced to liquidate during the credit crisis in 2008.
VALIC Company I Global Equity
David Kruth joined the management team of Alpine Cyclical Advantage Property
David Horsfall and Peter Vaream joined the management team of Dreyfus Inflation-Adjusted Securities
C. Wesley Boggs, Warren Chiang, Ronald Gala, Langton Garvin, and Patrick Slattery joined the management teams of Dreyfus Lifetime Growth & Income
Elizabeth Slover joined the management team of Dreyfus Natural Resources
Dawn Guffey joined the management team of Dreyfus Short-Intermediate Government
Thomas Casey joined the management team of Dreyfus Short-Intermediate Municipal Bond
Joseph Balestrino, Christopher Smith, Carol Miller, and Dean Kartsonas no longer manage Federated Asset Allocation
Eagle Growth & Income
Karen Uyehara joined the management team of Nationwide Bond Index
HSBC filed to launch HSBC Emerging Markets Equity on June 30, 2011. The fund will invest at least 80% of assets in emerging-markets stocks. The firm also launched two new emerging-market debt funds. HSBC Emerging Markets Debt invests primarily in U.S.-dollar-denominated debt of emerging-markets issuers, while Emerging Markets Local Debt invests in local-currency debt.