Plus, changes at Oppenheimer, Fidelity, and more.
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For the second time in its history, the board of Japan Fund SJPNX has decided to take the fund's business elsewhere. If shareholders approve the proposal, the fund's advisory contract will shift from Fidelity to Nomura Asset Management. This type of move is rarely witnessed in the mutual fund industry, but this board's done it before. It took a similar step in 2002, when the fund's longtime advisor, Zurich Scudder, was taken over by Deutsche Bank. In the spring of that year, a team from Deutsche Asset Management replaced the Scudder manager, who had run the fund since 1988 and was responsible for its stellar long-term record. A few months later, the fund's board awarded the advisor contract to Fidelity, and the move was approved by shareholders in October 2002. It's unclear what the advisor shift means for this fund's future, but shareholders will vote on the proposal in August.
Veteran Oppenheimer Quant Manager Retires
Nikolaos Monoyios, head of Oppenheimer's Main Street team, will retire on June 30. Monoyios comanages the team's three quant-driven funds: Oppenheimer Main Street MSIGX, Main Street Small Cap OPMSX, and Main Street Opportunity OMSOX. Monoyios worked for more than 20 years with former comanager Chuck Albers, first at Guardian Park Avenue, where they pioneered the funds' quantitative approach, and then here until Albers' retirement at the end of 2003.
It's a loss whenever that much experience walks out the door, but we think the funds remain in capable hands. Comanagers Mark Zavanelli and Mark Reinganum have been an integral part of the team since 1998 and 2002, respectively, and are deeply familiar with the funds' quantitative approach. Both will now be listed as comanagers on all three funds. Alex Zhou, who has been involved with the team's quantitative models since joining Oppenheimer in 1999, will also comanage the Main Street fund.
Fidelity's Management Revolving Door
For the second time in 2008, Fidelity's shuffling managers at Fidelity International Small Cap FISMX. Tokuya Sano, who was responsible for the fund's investments in Japan, is out, and Noriko Takahashi is in. Sano has comanaged this fund since its 2002 launch, and with his departure, none of the fund's original managers remain on board. In April, Fidelity replaced Ben Paton, who had overseen the fund's European slice since January 2004, with Colin Stone. Wilson Wong, who joined the fund in 2005 and runs its Asia ex-Japan stake, is now the senior member of the team.
At Fidelity Select Banking FSRBX, Vincent Montemaggiore has taken over for Ramona Persaud. Persaud will be sticking with the firm, relocating to London where she'll support manager Bill Bower as a research analyst on Fidelity Diversified International FDIVX. Montemaggiore joined Fidelity's equity research department in 2005, and he managed Fidelity Select Industrial Equipment FSCGX from 2007 until 2008, only recently picking up coverage of banks.
Legg Mason Partners to Merge One Fund Away, Grow Another in Its Place
Legg Mason Partners announced plans to launch a new dividend-focused fund under the name Equity Income Builder. Hersh Cohen, CIO of Clearbridge Advisors (subadvisor to the Legg Mason Partners fund lineup), will run the proposed fund along with comanager Peter Vanderlee. Cohen has delivered impressive long-term results over his nearly 30-year history running Legg Mason Partners Appreciation SHAPX. Over that stretch, the fund has gained an average of 13.6% a year, beating the S&P 500 by roughly 1% annually. The fund's 10-year record also lands in the large-blend category's top quintile. Vanderlee joined the management team at Legg Mason Partners Dividend Strategy CSGWX in December 2007, after working alongside his comanager Scott Glasser for 10 years as a research analyst and separate-account portfolio manager.PAGEBREAK
Dividend-paying stocks will take up a large chunk of the fund, and the Cohen and Vanderlee will have the flexibility to invest up to half its portfolio in international stocks, and another 25% in fixed-income securities. The proposed price tag of 1.35% on the fund's A shares is high relative to domestic broker-sold large-cap offerings, but it's on the cheap side compared with similarly distributed world stock funds.