Plus, PIMCO fee cuts coming, IVA Worldwide closes, and more.
The $3.5 billion in assets Calamos Convertible CCVIX, an Analyst Pick and the largest fund in its category, will close Friday to all investors except those who own it through employer-sponsored retirement plans. The fund had been closed to new investors since October 2010, but Calamos said it decided to further limit its availability because of inflows and because fewer companies are issuing convertible securities, particularly the higher-quality businesses whose securities Calamos prefers. Calamos has shut the fund's doors in the past. It was closed from April 2003 through October 2008.
Managed by a seasoned team, the fund's 15-year return is top-decile, and it sports a terrific downside capture ratio--a measure of how much pain a fund feels in a downturn relative to a benchmark--versus both the S&P 500 Index and the BofA Merrill Lynch All Convertible Index.
Another Analyst Pick, Vanguard Convertible Securities VCVSX, opted to reopen in May 2010 and more recently added two managers and broadened its investment universe to include non-U.S. convertibles.
Calamos also announced that Calamos Market Neutral Income CVSIX will be closed to new investors Friday.
PIMCO to Cut Fees
PIMCO has said it expects to cut administration fees on its funds within the next six months. The announcement comes several months ahead of expected regulatory clearance of its new broker-dealer, PIMCO Investments. The firm formed the new unit to begin distributing its own funds (duties that have been handled by parent Allianz).
As Morningstar has noted, PIMCO's fees have considerable room for improvement, especially given PIMCO's enormous economies of scale. A number of the firm's noninstitutional share classes are expensive relative to peers. For example, the institutional share class of the $241 billion PIMCO Total Return PTTRX carries a 0.46% expense ratio, comfortably below the intermediate-term bond category's 0.55% median for similar peers. But the expense ratio for the fund's D share class is 0.75%, above the 0.65% median for similarly distributed funds. According to data compiled in December 2010 by Eric Jacobson, Morningstar's director of fixed-income research, more than 40% of the PIMCO funds that Morningstar covers and that receive Stewardship Grades have expense ratios higher than the norm for similar peers'.
IVA Worldwide Closes to New Investors
IVA Worldwide IVWAX is closing to new investors Feb. 18. The fund launched in September 2008 and is managed by Charles de Vaulx and Charles de Lardemelle.
IVA Worldwide has trounced its peers since inception, returning 19.2% versus the average world-allocation fund's 7.3% gain. The fund's approach is also distinctive. It strives for equitylike returns from the fixed-income portfolio, which gives it a hefty high-yield corporate-bond stake.
While its $8 billion asset base is larger than many peers', it's dwarfed by the likes of American Funds Capital Income Builder CAIBX ($79.4 billion) and First Eagle Global SGENX ($27 billion). Both de Vaulx and de Lardemelle managed or comanaged the latter fund at different points during their tenures at Arnhold S. Bleichroeder (advisor to the First Eagle funds and now known as First Eagle Investment Management). They departed the firm in 2007.
Thornburg Muni Manager Shuffle
George Strickland is stepping down as comanager of Thornburg's muni-fund lineup to spend more time managing the taxable-bond fund Thornburg Strategic Income TSIAX. He intends to remain involved with the muni team but will focus day-to-day on international sovereign-debt markets.
Chris Ryon, who served as the head of Vanguard's muni group before joining Thornburg in 2008, gets a bump up from associate manager to comanager of the firm's muni funds. He'll remain comanager of Thornburg Strategic Municipal Income LTMFX and joins Chris Ihlefeld and Josh Gonze on the rest of the funds. Ihlefeld was also named comanager of Strategic Municipal Income.PAGEBREAK
Fidelity Growth & Income Gets New Skipper
Matthew W. Fruhan is replacing James Catudal as manager of the $6.2 billion Fidelity Growth & Income FGRIX Feb. 1. Catudal had only run the fund since January 2009, when he took over for Tim Cohen, who had managed it since late 2005.
The fund should be in good hands. Fruhan's tenure on Fidelity Large Cap Stock FLCSX, which he has run since May 2005 (he'll remain on board), has been solid. In that time, the fund has returned 5.7% annualized, easily topping the large-growth category's 3.9% gain over that period.
DoubleLine Wins a Round in Battle With TCW
A Los Angeles Superior Court judge ruled that TCW Group Inc. can't proceed with its request for a court order to temporarily close DoubleLine's mutual fund trust, nor can it pursue mutual fund returns. TCW had alleged that the trust misappropriated TCW's trade secrets.
TCW's lawsuit against DoubleLine, filed last January and alleging, among other things, breach of fiduciary duty, unfair competition, and misappropriation of trade secrets, is still on track. So, too, is DoubleLine's lawsuit, filed last February, which alleges that TCW fired DoubleLine founder Jeffrey Gundlach and several colleagues in order to prevent them from collecting as much as $1.25 billion in management and performance fees.
Transamerica's Flurry of Subadvisor and Fund Name Changes
Transamerica announced a number of subadvisor and fund name changes, effective March 31.
Morgan Stanley Investment Management will become the sole subadvisor on Transamerica Focus IALAX and Transamerica Growth Opportunities ITSAX. The funds will be renamed Transamerica Morgan Stanley Capital Growth and Transamerica Morgan Stanley Growth Opportunities, respectively.
J.P. Morgan Investment Management and BlackRock Financial Management will become the subadvisors to Transamerica Balanced IBALX, which will be renamed Transamerica Multi-Managed Balanced.
AEGON USA Investment Management, a Transamerica affiliate, will become subadvisors of Transamerica Flexible Income IDITX and Transamerica Short-Term Bond ITAAX pending shareholder approval. The funds' names will change to Transamerica AEGON Flexible Income and Transamerica AEGON Short-Term Bond, respectively.
Finally, Wellington Management Company will become the sole subadvisor to Transamerica Diversified Equity TADAX, and the fund will be renamed Transamerica WMC Diversified Equity.
Morgan Stanley Mid-Cap Growth DGRAX will close to new investors March 31. Since Dennis Lynch began managing the fund in October 2002 (David Cohen joined him in 2003), the fund has returned 14.2% annualized, well ahead of the typical mid-cap growth fund's 9.1% gain.
Subject to shareholder approval, Scout Investments will acquire the fund advisory businesses of two Frontegra bond funds. Frontegra Columbus Core FRIGX will be merged into Scout Bond UMBBX. The fund's new name will be Scout Core Bond. Also, Frontegra Columbus Core Plus FRTRX will be reorganized into a new offering, Scout Core Plus Bond.
DWS announced a few lineup changes. DWS Short Duration SDUAX will change its name and strategy in April. It will become DWS Ultra-Short Duration and will invest as much as 50% in high-yield and as much as 25% in non-U.S. bonds, including emerging markets. On March 31, DWS Emerging Markets Fixed Income SZEAX will change its name to DWS Enhanced Emerging Markets Fixed Income, and DWS Global Bond SZGAX will become DWS Enhanced Global Bond.
RiverNorth Capital launched RiverNorth/DoubleLine Strategic Income RNDLX, which will be subadvised by DoubleLine. Jeffery Gundlach and RiverNorth's Patrick Galley and Stephen O'Neill will manage the fund. DoubleLine's Gundlach will run the core fixed-income and opportunistic strategies in the fund, while the RiverNorth team will manage the tactical closed-end fund strategy.
Eli M. Salzman has joined Neuberger Berman from Lord Abbett. He'll serve as a managing director and portfolio manager focusing on U.S. large-cap value strategies.
Roumell Asset Management launched its first mutual fund, Roumell Opportunistic Value. It will hold cash, equities, and fixed income.
Forward Management announced its new Forward Tactical Enhanced fund, an absolute return offering.
Alger Convertible ACVFX will liquidate Feb. 28. Also, Steve Thumm replaced John Curry as portfolio manager of the fund.
Alger Balanced ALBAX will change its name to Alger Growth & Income. The fund's investment objective, strategy, and risks will be revised. John Curry no longer runs the fund; it's now managed by Steve Thumm and Dan Chung, as well as previous manager Andrew Silverberg.
James Macey is now on the portfolio-management team of the Allianz Global Investors Solutions series. He joined existing managers Paul Pietranico and Stephen Sexauer.
James Qin Li is no longer on the management team of Allianz AGIC Systematic Growth NGWAX. The fund is now managed by Kunal Ghosh and new manager Jane Edmonson.
On Feb. 1, 2011, Paul Broughton will replace Justin Roberge on the portfolio-management teams of Forward Aggressive Growth Allocation AAGRX, Forward Balanced Allocation ABAAX, Forward Emerging Markets PGERX, Forward Growth & Income Allocation AGWAX, Forward Income Allocation AIAAX, Forward Income & Growth Allocation ACIGX, Forward Frontier MarketStrat FRNMX, and Forward Strategic Alternatives ASAFX.
Thomas Nelson will join the portfolio-management team of the Franklin Templeton Retirement Target funds in May. The board overseeing the series also approved changes (also effective in May) to the target asset-allocation glidepath.
Yu-Nien Ko is no longer on the portfolio-management team of Legg Mason Batterymarch U.S. Small Cap Equity LMBAX. The fund is now managed by Stephen Lanzendorf and new manager Adam Petryk. Adam Petryk joined the portfolio-management team of Legg Mason Batterymarch U.S. Large Cap Equity LMTIX. The fund is managed by Petryk and existing managers Yu-Nien Ko and Stephen Lanzendorf.
Stephen Lanzendorf joined the portfolio-management team responsible for Batterymarch Financial Management's sleeve of Legg Mason Strategic Real Return LRRAX, as well as the portfolio-management team of Legg Mason Batterymarch International Equity LGIEX and Legg Mason Batterymarch Global Equity CFIPX.
On Jan. 5, 2011, Northern Multi-Manager Large Cap NMMLX replaced subadvisor Metropolitan West Capital Management with NWQ Investment Management. Northern Multi-Manager Small Cap NMMSX also replaced MetWest Capital Management and Copper Rock Capital Partners with Allianz Global Investors and Cardinal Capital Management. In the transition period between subadvisors, Northern Trust will manage their respective assets.
On March 31, 2011, Systematic Financial Management will become the sole subadvisor to Transamerica Small/Mid Cap Value IIVAX.