Thumbs up or thumbs down on the most important manager changes.
One of the trickiest things for investors to do is figure out what to do when a fund they own changes managers. There are obvious questions about whether the strategy will change and whether the new manager is as good as the old one, and it isn't always easy to find the answers. Here are the most important changes that occurred in the first half of 2007 and our take on what the change means to investors.
First Eagle Global
Charles de Vaulx is out after two years and Jean-Marie Eveillard is back in. Eveillard is 67, and he handed the reins to de Vaulx in 2004. Eveillard said he will run the fund for one year, run it for a second year with a comanager, and then be available for consultation for three more. First Eagle gave no reason for De Vaulx's departure.
If you own one of these closed funds, you should be pleased that Eveillard was available to step in, though the abrupt nature of De Vaulx's departure is a bit disconcerting. Eveillard had a much longer track record than De Vaulx, and he had remained involved in the funds. It's vital that Eveillard groom successors to take over as he steps back. I don't expect a big taxable event due to this change as Eveillard and de Vaulx had similar investing styles.
Oppenheimer Developing Markets
Mark Madden left Oppenheimer and was replaced by Justin Leverenz, who served as a senior analyst on Oppenheimer Global
Madden is an experienced manager with a long and strong track record, but his replacement has no prior portfolio-manager experience other than running a couple of offshore single-country funds for a short time. For a $10 billion emerging-markets fund, that feels like a big challenge. With 41% potential capital gains exposure, a big tax bill may await shareholders this year.
T. Rowe Price Growth & Income
Tom Huber, manager of T. Rowe Price Dividend Growth
One good manager has been replaced by another. We don't expect a change in strategy.
T. Rowe Price Growth Stock
Bob Smith left the fund to head up T. Rowe Price International Stock (see below). Rob Bartolo, who was comanager at T. Rowe Media & Telecommunications