• / Free eNewsletters & Magazine
  • / My Account
Home>Research & Insights>Fund Times>Fund Times: Fidelity Plans to Add New Fund Board

Related Content

  1. Videos
  2. Articles
  1. Jacobson's Picks for Core Bond Exposure

    Morningstar's director of fixed-income research offers his tips for selecting a solid core bond fund along with some of his favorite choices.

  2. How Fidelity Funds Stacked Up in 2013

    Fidelity's growth-leaning equity funds and more conservative bond funds made for a strong year for the fund firm, says Morningstar analyst Katie Reichart.

  3. Checking the Scorecard on Fidelity Funds

    Morningstar senior fund analyst Christopher Davis sizes up performance and stewardship at the fund family and discusses some of his favorite Fidelity funds.

  4. Consistency Key With 529s

    Fidelity's Andrew Dierdorf discusses how his firm's new open architecture strategies jell with Fidelity's legacy college-savings options.

Fund Times: Fidelity Plans to Add New Fund Board

Plus, new offerings from Buffalo Funds and Thornburg, and more.

Morningstar Analysts, 10/15/2007

Fidelity Investments recently confirmed its plans to create two separate fund boards. One of the boards will oversee Fidelity's equity and high-yield bond funds, and the other will be responsible for its fixed-income, money market, and asset-allocation offerings.

Fidelity wants to make the change because it plans to further expand its product lineup in the next five to 10 years. The fund shop has always been known for its asset-gathering imperative. In the past decade alone, Fidelity has roughly doubled the number of funds the board oversees to 369. Fidelity spokeswoman Anne Crowley said the growing complexity of financial markets, such as the increased use of derivatives in the fixed-income space requires additional board oversight.

It is unknown at this point how the current board will be affected and if CEO Ned Johnson will continue to serve as chairman of one of the new boards. More details will emerge when proxy materials are sent to shareholders early next year. Crowley said Fidelity should complete the move next summer.

The creation of a new board is a positive development. A single-board structure encourages trustees to view the firm's funds as a family unit, as opposed to separate entities that are supposed to act in their investors' best interests. Further, since the first version of Morningstar's Stewardship Grades was launched in 2004, we have questioned the Fidelity board's ability to oversee the shop's entire lineup. Even with its 10 different committees and frequent meetings, more than 300 funds across a wide range of asset classes is a heavy load. However, Fidelity has always vehemently denied that its board was overworked.

Buffalo Funds Launches International Fund
Buffalo Funds recently added Buffalo International to its lineup. The fund invests in companies that are based or traded outside of the United States or derive at least 50% of their revenues from abroad. Up to 30% of fund assets may be invested in emerging markets. Portfolio manager Bill Kornitzer applies the same price-conscious approach applied at other Buffalo growth funds. Kornitzer and his analysts attempt to identify financially healthy companies with long-term growth potential that are trading at reasonable prices. The fund's expense ratio is 1.21%, which falls in the middle quintile of no-load foreign large-cap offerings.

Thornburg Readies New Go-Anywhere Fixed-Income Fund
Thornburg Investment Management plans to launch an opportunistic fixed-income offering. The firm recently filed plans with the Securities and Exchange Commission for Thornburg Strategic Income. This fund will be allowed to invest in government, agency, mortgaged-backed, asset-backed, and corporate bonds (including corporate high yield) in the United States. It can also invest in non-dollar and emerging-markets securities. The fund will also allow the use of derivatives. This strategy will be unlike any other fixed-income strategy available at Thornburg, as the manager's current lineup is limited to municipal and short-term bond offerings. We'll follow up with new details as they emerge.

Masters' Select International Adds Sixth Subadvisor
Litman/Gregory Fund Advisors has hired Northern Cross to serve as the sixth subadvisor for the recently reopened Masters' Select International MSILX. Litman/Gregory wanted to increase portfolio diversification and give the fund more capacity, the lack of which had led to the fund's closing approximately three years ago. Northern Cross is responsible for 10% of the fund's assets. Northern Cross' management team includes cofounders Howard Appleby, Jean-Francois Ducrest, Jim LaTorre, and Ted Wendell. They utilize a growth-at-a-reasonable-price approach, and focus on large and mid-sized companies. Litman/Gregory says the team also consults Hakan Castegren, manager of Harbor International HAINX, regarding portfolio themes and ideas.

SunAmerica Replaces Navellier with Janus
SunAmerica Focused Series' board of directors has voted to replace Navellier & Associates with Janus Capital Management as one of the subadvisors for SunAmerica Focused Large Cap Growth SSFAX. Ron Sachs, the heir apparent for Janus Twenty JAVLX, joins Tom Marsico of Marsico and Bob Doll of BlackRock Large Cap Growth MDLHX as a subadvisor of this offering. Manager turnover has been a major issue for this Analyst Pan. Most recently, Bob Doll and his analysts at BlackRock replaced Dan Chung's team at Alger Group in December 2006.

John Hancock Reopens Large-Value Fund
John Hancock reopened JHancock Classic Value PZFVX to new investors on Oct. 1, 2007. The fund, which is subadvised by Pzena Investment Management, had been closed to new investors since mid-September 2006. The fund has more than tripled in size in the past three years; since then John Hancock has launched a number of funds built on Pzena's approach and reputation, including JHancock Classic Value II JHVAX, International Classic Value JHFAX, and Classic Value Mega Cap JMEAX. Pzena also subadvises sleeves of John Hancock's Lifestyle and Lifecycle retirement funds.

Funds Impose New Fees, Raise Old Ones
Effective Oct. 16, 2007, TIAA-CREF will charge a redemption fee on the institutional share classes of TIAA-CREF International Equity TIIEX, International Equity Index TCIEX, Small-Cap Equity TISEX, Small-Cap Growth Index TISGX, Small-Cap Value Index TISVX, Small-Cap Blend Index TISBX, and High-Yield II TIHYX. The firm will exact a 2.00% levy on shares redeemed or exchanged within 60 days of purchase.

Japan Fund SJPNX recently raised its 12-b1 fee from 0.15% to 0.25%. The fund's new net expense ratio of 1.49% falls in the second-cheapest quintile of no-load, diversified Pacific-Asia/Japan stock offerings.

1
blog comments powered by Disqus
Upcoming Events
Conferences
Webinars

©2014 Morningstar Advisor. All right reserved.