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Fund Times: Value Guru Greenwald to Join Eveillard at First Eagle

Plus, Vanguard's new funds, changes at Van Kampen, fund closings and more.

Morningstar Analysts, 10/01/2007

Arnhold and S. Bleichroeder Advisers announced that renowned value-investing expert and academic Bruce Greenwald will join the ranks as the new director of research for its Global Value group. Greenwald will continue his role as professor of finance and asset management at Columbia's Graduate School of Business when he assumes his new duties.

This change follows on the heels of Jean-Marie Eveillard's return to his former role as portfolio manager of First Eagle Global SGENX, First Eagle Overseas SGOVX, First Eagle U.S. Value FEVAX, and First Eagle Gold SGGDX after previous manager Charles de Vaulx resigned suddenly in March. Although Eveillard is expected to scale back his involvement with the funds gradually over the next five years, he indicated in the news release that he plans to "remain fully engaged" with the funds upon Greenwald's arrival.

Although Greenwald certainly has an impressive background, this news comes with the surprising announcement that former research director Charles de Lardemelle has left to pursue other interests. A veteran of the firm since 1996, de Lardemelle was named associate manager of the Global, Overseas, and U.S. Value funds when Eveillard returned in May. We had previously considered de Lardemelle, who had worked closely with Eveillard for more than a decade, to be a likely successor. Simon Fenwick, comanager of the Gold Fund, also has exited the firm. Fenwick became associate manager in 2005 and was promoted to comanager when de Vaulx left.

Stepping into de Lardemelle's vacated associate manager shoes is Abhay Deshpande, who has been with the firm since 2000 as a senior member of the value research team and portfolio manager for separate accounts.

New Funds, ETF Fees Cut at Vanguard
Vanguard has announced plans to launch three new mega-cap index funds. Fees on these funds will be characteristically miniscule: Expense ratios for the ETF, Institutional, and Investor shares are expected to be 0.13%, 0.08%, and 0.20%, respectively.

While index funds are par for the course here, more interesting was Vanguard's Thursday announcement that it would introduce a series of funds designed to provide retirees with an annuitylike stream of income. This is part of a broader trend of products allowing people to convert their defined-contribution plan retirement savings into regular monthly payments. We'd expect the popularity of such products to grow as baby boomers continue to enter their retirement years. Vanguard will offer three separate "Managed Payout" funds-of-funds that offer different levels of income and capital preservation. The funds' estimated price tag is 0.34%.

Vanguard is also cutting costs on 10 sector ETFs, most dropping from 0.25% to 0.22%. This will be the second time fees have come down here since the ETFs were initially launched in 2004 with expense ratios of 0.28%.

Veteran Growth Managers Leave Van Kampen
Van Kampen has announced that it has replaced Gary Lewis, Dudley Brickhouse, and Janet Luby, longtime managers of Van Kampen Aggressive Growth VAGAX and Van Kampen Strategic Growth ACEGX. These funds each gained more than 100% in 1999, only to follow these stunning results with staggering losses during the subsequent bear market. Lately, the team had been tweaking its strategy in an effort to turn these ailing funds around. While 1999's unusual showing buoyed the funds' long-term returns, Morningstar Investor Returns show that the average investor in these funds fared much worse than the fund itself, just breaking even over the past 10 years.PAGEBREAK

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