Also, news on Legg Mason, Vanguard, Columbia, Morgan Stanley, and more.
TIAA-CREF took steps to engineer a backdoor fee hike for individual investors in its funds. The firm filed a proxy statement April 21 with the SEC asking shareholders to approve a plan that would fold its retail mutual funds into its institutional counterparts, which employ identical or very similar strategies but will charge significantly higher expense ratios next year. A shareholder vote is slated for Aug. 8.
The vote affects shareholders of TIAA-CREF's 10 retail funds--TIAA-CREF Growth Equity
Under the proposal, the assets of the 10 funds would be dumped into the retail share classes of their institutional counterparts. For instance, shareholders of TIAA-CREF Growth Equity would own the retail share class of TIAA-CREF Institutional Growth Equity
Typically, institutional funds are cheaper than retail funds. But in most instances, retail shareholders would end up paying much more under TIAA-CREF's proposal, especially after the firm begins implementing 12b-1 marketing fees in April 2007. TIAA-CREF Bond Plus' expense ratio is a modest 0.30% but would rise to 0.39% when merged with TIAA-CREF Institutional Bond Plus II. With a 0.25% 12b-1 fee, total expenses could rise to 0.64% annually, more than double the fund's current costs.
Also, the retail funds closed to new investors on April 28.
Bill Miller's Case Against Commodities
In his latest commentary, Legg Mason Value
"Since the (commodities) rally we are experiencing is already bigger and longer lasting than the one that kicked off the 70's, it takes a determined optimist to say that now is time to be putting money in commodities," Miller wrote.