Plus, T. Rowe launches fund, Fidelity manager changes, and more.
Nearly midway through 2010 the average domestic-stock fund is up more than 6% through May 5, despite uncertainty about the strength of the economic recovery, the sustainability of the more-than-year-long rally, and the knock-on effects of the Greek financial bailout and spreading European-debt crisis.
Most stock funds have managed to climb this wall of worry, but some have not. Solar power and other green energy stocks have hurt socially responsible investing funds. Gabelli SRI Green SRIAX, a concentrated mid-cap blend offering, is down 4.4% versus the category's 9.2% return. Eight of its top 10 holdings, totaling almost 30% of the fund's assets, are in the red this year, and four of those are down more than 30%. Electric power and solar firms such as American Superconductor Corporation AMSC and Canadian Solar CSIQ are down 32.8% and 44.0%, respectively. Neuberger Berman Climate Change NBCAX is down 3.6%, hurt by stocks such as energy and transportation data firm Telvent GIT SA TLVT (also the top holding in Gabelli SRI Green); it is down by 31.4% in 2010. Almost half of the fund's stocks are negative for the year.
Large-growth funds, which have lagged other categories over the past decade, are trailing again this year. Prudential Jennison 20/20 Focus PTWAX is down 3.1%, while the typical large-growth fund is up 3.2% and the S&P 500 Index is up about 5%. As of the most recent publicly available portfolio, more than 25 of the fund's 40 holdings--representing almost 60% of assets--were down for the year. It still has a strong long-term record, though, gaining an annualized 6.7% since its 1998 inception, crushing the typical large-growth fund and the index.
T. Rowe to Launch a Fund for Itself
This week, T. Rowe filed to offer a fund just for other T. Rowe funds to invest in. T. Rowe Price Real Assets will launch in June and own shares of commodities, real estate, basic materials, equipment, utilities, and infrastructure firms. T. Rowe funds-of-funds manager Ned Notzon will run it.
There's a good chance that T. Rowe plans to use the new fund in its target-date retirement funds, though it has not said so. Fidelity and MFS have created similar internal funds for use in their target-date funds. If T. Rowe intends to use the new Real Assets fund to provide an inflation hedge and add an asset class that doesn't correlate with equities to its target-date mix, it might be disappointed. The products of the companies may achieve those goals, but this fund will invest in the businesses' stocks.
Fidelity Shuffles Managers
Fidelity recently announced a number of manager changes. First, Rich Fentin, who had managed Fidelity Value FDVLX since 1996, is retiring. He's being replaced by Matt Friedman, who will also take over from Fentin on Fidelity Advisor Value FAVFX. Friedman, who will comanage the funds with Fentin for a three-month transition period, will manage a portion of the funds. The remainder of assets will be managed by a team of Fidelity Select sector-fund managers: Shadman Riaz, Stephen Barwikowski, John Mirshekari, Laurie Bertner, and James Justin Bennett. They'll join as co-portfolio managers in June, and each will keep his or her portion of the fund sector-neutral.
Friedman is being replaced as manager of Fidelity Advisor Value Strategies FSOAX by Tom Soviero, who will continue to manage Fidelity Leveraged Company Stock FLVCX, Fidelity Advisor Leveraged Company Stock FLSTX, and Fidelity Convertible Securities FCVSX. He'll also continue to comanage Fidelity Advisor High Income Advantage FAHYX.
Finally, effective June 30, Jonathan S. Kasen will take over as portfolio manager of Fidelity Select Energy Service FSESX, succeeding John Dowd. Dowd will continue to manage Fidelity Select Energy FSENX and Fidelity Select Natural Resources FNARX and serve as a comanager of Fidelity Stock Selector FDSSX.PAGEBREAK
Neuberger Berman Liquidates Fund
Neuberger Berman liquidated Neuberger Berman Small/Mid Cap Growth NBATX on May 28, 2010. The less-than-4-year-old, $1.5 million fund, a combination of Neuberger Berman Small Cap Growth NBMIX and Neuberger Berman Mid Cap Growth NMANX, never caught on with investors.
Wasatch Closes Fund
Wasatch Advisors announced Wednesday that Wasatch Micro Cap Value WAMVX will close to new investors on May 26. The firm's director of mutual funds, Eric Huefner, said the firm chose to close the fund before it reached a critical point so existing shareholders could still invest in the fund, which currently has about $200 million in assets.
Ameriprise Financial AMP closed its acquisition of Columbia Management from Bank of America BAC, which was first announced in September 2009. Ameriprise Financial's RiverSource funds will be combined with Columbia under the Columbia name, while the Seligman and Acorn fund brands will survive. A slew of manager changes accompanied the acquisition, so investors should keep an eye out for fund filings and updated Morningstar analyses.
The board of Charles Schwab's SCHW Laudus Rosenberg funds has opted to liquidate the funds in the wake of a recently disclosed error made by the funds' subadvisor, AXA Rosenberg.
The expense ratio for TCW Growth Equities TGGEX has been capped at 1.20% for both share classes. Also, TCW Focused Equities TGFFX has been renamed TCW Concentrated Value.
Matthews International Capital Management, LLC, renamed Matthews Asian Technology MATFX to Matthews Asia Science and Technology to better reflect its investment strategy. The fund's strategy and ticker remain unchanged.
Nile Capital Management launched Nile Pan Africa, which will focus exclusively on the African continent using a mix of macroeconomic research and bottom-up fundamental research.
Schwartz Investment Counsel Inc., the manager of Ave Maria mutual funds, launched Ave Maria World Equity, the family's sixth fund. Also, the management fees for Ave Maria Catholic Values AVEMX and Ave Maria Growth AVEGX have been reduced to 0.95% annually from 1.00% annually.
Ivy Funds launched Asset Strategy New Opportunities, a go-anywhere fund that will focus its equity allocation on small- and mid-cap companies around the globe, including emerging and frontier markets.
Russell Shtern joined the management teams of DWS Blue Chip KBCAX, DWS Growth & Income SUWAX, and DWS Disciplined Market Neutral DDMAX.
Joseph MacDougall replaced Telis Bertsekas as portfolio manager of MFS Technology MTCAX.
Michael Faloon is no longer comanager of Dreyfus High Yield Muni DHYAX. James Welch remains as the fund's sole portfolio manager.
Alex McDougall joined the portfolio-management team of BlackRock International Value MDIVX.
Pending shareholder approval, Credit Suisse Large Cap Value WFGIX and Credit Suisse Mid-Cap Core CUWAX will merge into Credit Suisse Large Cap Blend CFFAX.
Harness Absolute Return HIARX will liquidate all assets by May 14, 2010.
Get fund news delivered to your e-mail inbox every Monday. Sign up for our free Fund Times e-newsletter.