• / Free eNewsletters & Magazine
  • / My Account
Home>Research & Insights>Fund Times>Supreme Court to Weigh In on Mutual Fund Fees

Related Content

  1. Videos
  2. Articles

Supreme Court to Weigh In on Mutual Fund Fees

Plus, more fund mergers announced.

Morningstar Analysts, 03/16/2009

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.

The Supreme Court announced last week that it will review the fund fee case brought against Harris Associates, advisor to the Oakmark funds. The Supreme Court will hear oral arguments for Jones v. Harris this fall. The Supreme Court will weigh in on whether Harris' fees were excessive.

Transamerica Fires Advisors
Transamerica has fired TCW and AllianceBernstein from Transamerica Partners Large Value Fund DVEIX because of performance and volatility. Stepping in for AllianceBernstein is Philadelphia-based quant shop Aronson+Johnson+Ortiz (AJO), and Hotchkis and Wiley is taking over for TCW. AJO comanages another Transamerica fund, Transamerica Partners Large Core DVGIX, with BlackRock. AJO also manages Quaker Small-Cap Value QUSVX, a small-blend fund, and Absolute Strategies ASFIX, a fund of funds within the long-short category.

Rodriguez to Take Sabbatical
FPA's Bob Rodriguez announced that he will step back from day-to-day management of his funds, FPA Capital FPPTX and FPA New Income FPNIX, in 2010.

Vanguard Adopts New Policy for Controversial Holdings
Vanguard's fund board recently directed the firm to report back on companies in which it invests that might be involved with human rights' abuses. Vanguard, along with other investment firms, has been subject to criticism from special-interest groups that object to the funds' investments in firms such as PetroChina PTR.

Under the new policy, the fund board will receive regular reports on companies in which they invest "whose direct involvement in crimes against humanity or patterns of egregious abuses of human rights would warrant engagement or potential divestment."

It is unclear what impact this new procedure will ultimately have on a formal shareholder proposal from Investors Against Genocide, which would require a similar review process for holdings at 30 Vanguard funds.

RiverSource and Seligman Fund Merger Update
Just weeks after RiverSource's purchase of Seligman, RiverSource says it plans to merge 47 Seligman and RiverSource funds. The affected funds include Riversource Global Technology AXIAX, which would be merged into Seligman Global Technology SHGTX. Meanwhile, Seligman Common Stock SCSFX would merge into RiverSource Disciplined Equity AQEAX. In addition, the majority of Seligman's single-state municipal-bond fund lineup would be merged into Seligman National Municipal SNXEX.

Of the 47 funds involved, 30 Seligman funds will charge shareholders 0.16% of assets to change transfer agents. We're disappointed that RiverSource elected to pass this cost on to fundholders, though the mergers should generate economies of scale and using one transfer agent for all funds should result in some annual savings over the long term. These savings will lower the expense ratios on most of the merged Seligman funds 12 months after they are merged, which is expected (pending shareholder approval) in May.

Fidelity Launches Cheaper Share Class for Retirement Plans
Fidelity is launching a new low-cost share class aimed at retirement plans. The new K shares will be available only through retirement plans. For example, while Fidelity Freedom 2030 FFFEX charges 0.76%, the K shares will be almost 30% cheaper and charge only 0.54%. 

1
blog comments powered by Disqus
Upcoming Events
Conferences
Webinars

©2014 Morningstar Advisor. All right reserved.