Plus, news on Fidelity, Schneider, Wintergreen, Domini, PIMCO, JP Morgan, and more.
Matthews Pacific Tiger
We're encouraged by Matthews International Capital Management's decision to close the fund to new money before asset size becomes unmanageable. The managers at this fund still invest in an all-cap style, including in small-market and small-cap opportunities, so closing the fund now should help it maintain flexibility and liquidity in these more thinly traded areas. With an average market cap close to half the category norm, this fund should also continue to provide better diversification than many of its category peers. Matthews has a better history in shareholder-friendly asset management than many advisors who invest in Asian firms. It closed Matthews Asian Growth & Income
Templeton Announces New BRIC Fund
Franklin Templeton Investments has announced the launch of Templeton BRIC Fund, which focuses on companies in Brazil, Russia, India, and China (thus, the acronym). The fund will be managed by longtime Templeton emerging-markets hand Mark Mobius, who has more than 30 years experience in investing in these types of markets. The firm's deep bench of emerging-markets research analysts will support Mobius. By prospectus, the fund must invest at least 80% of its net assets in BRIC companies, or in companies that produce a large share of revenue and profits in those countries. The fund will be benchmarked to the MSCI BRIC Index.
While this fund should provide investors with fairly concentrated exposure to selected companies in four of the world's fastest-growing economies, there are questions about this approach. Both Brazil and Russia have resource-rich economies that have prospered recently, as broad-based commodity prices have increased. Should commodity prices see significant declines, however, it could be difficult for management to find good opportunities. Additionally, the political risks of these nations, and the companies that operate within them, are many. Mobius and the Templeton team have a good deal of experience in navigating risks like these, but investors should still be careful here.
Fidelity to Close Small Cap Stock Fund
Fidelity Investments will close Fidelity Small Cap Stock
"Small-cap funds have had a run of strong performance relative to other asset classes over the past several years.. We've analyzed the situation closely, and believe that it's in the best interests of shareholders to close the fund to new investors at this time," said Bruce Herring, Fidelity's chief investment officer for growth, value, small-cap, and mid-cap sectors, in a statement released last week.