Plus, Dodge & Cox, Matthews announce distributions and more.
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Allianz Global Investors Value PDLAX, which in August 2008 got a new name and management team, will merge with Allianz NFJ Large Cap Value PNBAX, pending shareholder approval. NFJ Investment Group has run the $755 million Allianz NFJ Large Cap Value fund since its inception in 2002 and recently took over the $547 million Global Investors Value fund, which had struggled during the short tenure of Oppenheimer's Colin Glinsman. NFJ cofounder Ben Fischer heads up a team that also includes experienced managers Paul Magnuson, Jeffrey Partenheimer, and Tom Oliver. They have successfully practiced a deep-value, dividend-focused strategy at other charges, including Allianz NFJ Dividend Value PNEAX, which reopened to investors in May 2008. The proposed merger will bolster the fund's asset base and could potentially mean lower fees.
In a year when most equity funds have faced steep losses, many investors are wondering if they will also be stuck paying taxes on capital gains distributions. Dodge & Cox, whose funds have fallen hard this year, announced that only Dodge & Cox International DODFX, which has lost half of its value this year, will make capital gains distributions. The estimated short-term distribution (securities held for less than a year are taxed at a higher rate) is $0.06 per share, or less than 0.3% of the fund's current net asset value. The estimated long-term distribution is $1.41 per share, or 6% of the fund's current net asset value as of Nov. 12.
Matthews Asian Funds announced that nine of its 10 funds will make capital gains distributions in December. Some of the long-term distributions are especially sizable. Matthews China MCHFX, which is down 56% in 2008, will make an estimated long-term distribution of $6 per share, or roughly 34% of its current net asset value. Matthews Pacific Tiger MAPTX, down 51% for the year, will distribute about one fifth of its current net asset value with an estimated long-term distribution of $2.93.
Wasatch Global Opportunities Fund WAGOX will launch Nov. 17. Robert Gardiner, who successfully ran Wasatch Micro Cap WMICX from 1995 to 2007 and Wasatch Small Cap Value WMCVX from 1997 to 2002, has relinquished his role as director of research to run this fund with Blake Walker of Wasatch International Opportunities WAIOX. The fund will primarily focus on out-of-favor small- and micro-cap companies that are trading at low valuations relative to their earnings growth potential and will include a mix of domestic and foreign stocks. Wasatch's research efforts are commendable, but the fund's 2.25% expense ratio is steep.
PIMCO is planning to launch PIMCO Unconstrained Tax Managed Bond Fund in 2009. Although the fund can invest across the fixed-income spectrum, it will devote at least 50% of its assets to municipal bonds (which are exempt from federal taxes) and will limit exposure to the Alternative Minimum Tax. PIMCO managing director Chris Dialynas, who has been with the firm since 1980 and currently manages several of the firm's funds, will run the new offering.PAGEBREAK
Fidelity Fund Reopens
Fidelity Mid-Cap Stock FMCSX reopened to investors Oct. 13. It closed to new investors in April 2006 after swelling to $12.6 billion in assets and ranking as the second-largest mid-growth fund. Investors have steadily pulled money out of the fund since November 2007 as the credit crisis unfolded. The fund had nearly $2 billion in net redemptions in October 2008 alone, and the fund's assets have since shrunk to $5.3 billion.
Although the fund has slimmed down, it's still a behemoth compared with its average mid-growth peer, which has assets of $165 million. Size has hampered the fund in the past, forcing it to invest more heavily in large-cap stocks and limiting the impact of individual holdings. While the fund is relatively cheap and has amassed a decent record under manager Shep Perkins, its large asset base is still a concern.