• / Free eNewsletters & Magazine
  • / My Account
Home>Research & Insights>Fund Times>Vanguard, Oakmark Reopen Attractive Funds

Related Content

  1. Videos
  2. Articles

Vanguard, Oakmark Reopen Attractive Funds

Plus, Vanguard merges muni funds, Putnam makes more changes, and more.

Morningstar Analysts, 11/10/2008

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.

A number of good funds reopened this week, including moderate-allocation offering Oakmark Equity & Income OAKBX, foreign small/mid growth Fund Analyst Pick Vanguard International Explorer VINEX, and precious-metals Analyst Pick Vanguard Precious Metals and Mining VGPMX.

The $12.5 billion Oakmark Equity & Income has lost less than its peers in the last turbulent year, but that hasn't stopped shareholders from leaving the fund. Outflows have increased as the fund's managers are finding more opportunities, comanager Clyde McGregor said in a news release. McGregor and comanager Edward Studzinski have an excellent track record. The fund ranks first in its category over the trailing three-, five-, and 10-year periods ending Nov. 5, 2008, and has a low 0.83% expense ratio. Also, both managers have a significant amount of their own money invested in the fund.

Vanguard International Explorer, which is run by Matthew Dobbs and his team at subadvisor Schroder Investment Management, first closed in August 2004 when it had $1.4 billion assets to preserve its ability to invest in less-liquid international small-cap stocks. In recent months shareholder redemptions combined with market declines have shrunk the fund's asset base to $1.1 billion as of Oct. 31. The fund is an attractive option for those seeking exposure to this often-volatile segment of the global market. Dobbs pays more attention to valuation than his peers and keeps the portfolio diversified across sectors and regions. He also keeps a below-average stake in emerging-markets stocks. Those factors have helped the fund lose less than its rivals for the year to date. This approach has led to competitive returns over the long haul as well. The fund has a dirt-cheap 0.35% expense ratio and requires a minimum investment of $25,000.

Vanguard Precious Metals and Mining, run by manager Graham French of subadvisor M&G Investment Management, closed in February 2006 to preserve his investment flexibility. Sharp drops in metals and other commodity prices have hurt the fund recently. It has fallen 57.3% for the year to date through Nov. 5, 2008, and resides in the precious-metals category's basement. Those losses and investor redemptions have reduced the fund's assets to $1.7 billion, less than a third of its June 2008 peak of $5.7 billion. Recent losses expose this fund's and this narrow sector of the market's risks, but this fund remains a worthy choice for those looking for exposure to precious-metals stocks. French is a bottom-up stock-picker who looks for companies trading below his estimates of their intrinsic worth. His portfolio is not only diversified across a variety of metals such as nickel, platinum, copper, and gold, but it also includes fertilizer and energy companies. With a 0.28% expense ratio the fund also is one of the cheapest precious-metals funds. The fund requires a minimum investment of $10,000.

Vanguard to Merge Muni Offerings
Vanguard has closed the $3.2 billion Vanguard Insured Long-Term Tax-Exempt VILPX to new investors in preparation for the fund's merger with the $2.8 billion Vanguard Long-Term Tax-Exempt VWLTX on Dec. 12, 2008. "The municipal bond market has changed to a point where insured bonds provide little, if any, additional benefit over high-quality uninsured credits," said Vanguard CIO Gus Sauter in a news release. The merger raises no immediate concerns. Long-Term Tax-Exempt is an Analyst Pick and has a higher-quality portfolio, a topnotch management team, and the same 0.15% expense ratio.PAGEBREAK

Putnam to Revamp Sector Funds and Launch New Offering
On Jan. 2, 2008, Putnam Utilities Growth & Income PUGIX will change its investment policy and its name to Putnam Global Utilities. Currently, the fund is divided into five sleeves: roughly 70% of assets is in U.S. electric and natural-gas utility stocks, picked by lead manager Michael Yogg; 15% is in global telecom stocks, picked by Craig Goryl; 10% is in European utilities and 5% in Asian utilities, picked by Vivek Gandhi and Matthew Doody; and between 0% and 10% in utility bonds, picked by Kevin Murphy. Going forward, the fund will no longer invest in telecom stocks and utility bonds. And true to its new moniker, the fund will invest more heavily in international stocks. The fund will also be allowed to short sell. Putnam will also impose a 1.00% redemption fee on shares that are redeemed within 90 days of purchase.

Stock fund Putnam Health Sciences PHSTX also will be allowed to invest internationally and become Putnam Global Health Sciences. And as reported earlier, Putnam is launching a number of sector funds in early 2009. Ultimately, the firm will have a fund for each of the nine MSCI global sector subindexes.

blog comments powered by Disqus
Upcoming Events
Conferences
Webinars

©2014 Morningstar Advisor. All right reserved.