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Oppenheimer Lures Top Value Manager and Others from RS

Plus, Putnam launches leveraged funds, and more.

Morningstar Analysts, 05/25/2009

Morningstar's fund analysts cover 2,000 mutual funds. Their full analyst reports, including Stewardship Grades, are available in Morningstar Principia Mutual Funds Advanced and Morningstar Advisor Workstation Office Edition.

Mani Govil, who in late March left the helm of RS Large Cap Alpha GPAFX, has reemerged as lead manager of Oppenheimer's Main Street line of funds.

Govil, who had steered the previously poor-performing RS Large Cap Alpha to the top 1% of the large-blend category during his tenure from August 2005 through March 29, 2009, will manage two funds: The $5 billion large-blend fund, Oppenheimer Main Street MSIGX, and the $1.5 billion all-cap fund, Oppenheimer Main Street Opportunity OMSOX. The funds will use both quantitative (or computer-aided) and fundamental, bottoms-up value strategies. Previously, the Main Street funds were quant offerings.

Govil will run the large-blend Oppenheimer Main Street similar to Large Cap Alpha. He's a low-turnover, bottom-up value investor who buys strong franchises at a discount to his estimate of their intrinsic values. The fees at the Oppenheimer fund will be slightly cheaper than the RS fund--0.91% versus 0.93%.

Another former RS manager, Matt Ziehl, who helped steer RS Small Cap Core Equity GPSCX, will help run Oppenheimer Main Street Small Cap OPMSX. In total, 12 investment personnel have moved from RS to Oppenheimer, including Govil.

The Oppenheimer portfolios won't change overnight. It will take at least a few months for the Main Street fund, for example, to trim its holdings to Govil's preferred size of fewer than 100 holdings. It currently has 848.

Columbia Manager Un-retires
Peter Larson, comanager of Columbia Small Cap Core LSMAX, will not retire as expected on June 30, 2009. This will provide the fund some stability, as its other comanager, Allyn Seymour, stepped down in April after working on the fund since its 1992 inception. Larson's long-term record with Small Cap Core is solid--the fund is up more than 6.5% over the last 10 years through May 20, which tops 80% of the small-blend group as well as the Russell 2000 Index.

Putnam Launches Leveraged Funds
Putnam launched two new funds this week that will invest in the stocks, bonds, bank loans, and convertible securities of leveraged companies, or those with a lot of debt. David Glancy, who joined Putnam earlier this year after several years of investing like this at Andover Capital and Fidelity Investments, will run Putnam Capital Spectrum PVSAX and Putnam Equity Spectrum PYSAX.

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