Plus, a strong mid-cap fund reopens, manager changes, and more.
Several PIMCO funds now have new managers. Mihir Worah has taken over the firm's real-return strategy funds from John Brynjolfsson, who will stay at PIMCO but spend more time on client relationships and macroeconomic research. Worah will manage PIMCO Real Return PRTNX, PIMCO Commodity Real Return PCRAX, PIMCO RealEstateRealReturn PETAX, and PIMCO Real Return Asset PRAIX. Brynjolfsson will, however, continue to run some of these same strategies in separate accounts.
This change doesn't concern us because the infrastructure that has made these funds a success remains in place. Brynjolfsson will still work with PIMCO's huge real-return team. Worah has been a team member since joining the firm in 2001. See this article for more on PIMCO, including details about PIMCO Total Return's PTTRX manager Bill Gross having just won Morningstar's 2007 Fixed-Income Manager of the Year Award.
Westport Reopens Mid-Cap Fund
Mid-blend fund Westport Select Cap WPSRX is open again. This could be a good opportunity for those seeking a proven mid-cap offering. The fund has been managed by the same team since its late 1997 inception, and it has a 10-year record worth cheering. Comanagers Andrew Knuth and Edmund Nicklin have delivered a 12.5% annualized gain in that time period, better than 90% of rivals. And, it's likely Westport will reclose the fund once it balances redemptions with inflows, which is the purpose of this move. It first closed the fund in 2002 to preserve its managers' ability to invest in smaller stocks, such as those whose market caps are still less than $2 billion.
Matthews Adjusts Manager Lineup
Four Matthews funds have made modest manager adjustments. Matthews CIO Mark Headley has stepped back from lead roles at Matthews Pacific Tiger MAPTX, Matthews Asian Technology MATFX, Matthews China MCHFX, and Matthews Korea MAKOX to focus on his health. Sharat Shroff has become a lead comanager at Pacific Tiger, joining Richard Gao and Headley. At Matthews China, Michael Oh becomes lead manager with Headley and Andrew Foster as comanagers. Joining Headley on the Asia Technology fund is Lydia So, who assumes Oh's responsibilities there. Similarly, Michael Han takes over Oh's responsibilities at the Korea fund, joining Headley as comanager. Matthews is known for the depth of its team and its experience investing across the Pacific, so we think shareholders of these funds are still in good hands.
Applause for Lower Expenses
Laudus Rosenberg International Equity RIEIX is now cheaper. The foreign large-blend fund has capped its expense ratio at 1.40% for investor-class shares, down from 1.64% (though it remains a bit pricey versus its typical no-load rival). MFS Emerging Growth MFEGX, which competes in the large-growth group, also lowered expenses to 1.15% from 1.26%, making it cheaper than most large-growth funds with front-end loads.
Putnam Raises Sales Loads
The expense news wasn't all good for investors, however, as Putnam raised sales loads nearly across the board on its lineup. Sales loads on A shares of domestic-equity funds such as the flagship Putnam Fund for Growth & Income PGRWX will rise to 5.75% from 5.25%. For taxable and tax-free bond funds, sales loads rise to 4% from 3.75%. For further commentary on bond-fund sales loads, we recommend this article. In it, we discuss loads' impact on the returns of bond funds, especially those with typically lower yields, such as short-term offerings and government-bond funds.