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Fund Times: TIAA-CREF Gets What It Wants

Plus, news on PowerShares, Janus, Vanguard, Fidelity, Wasatch, more.

Morningstar Analysts, 01/27/2006

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TIAA-CREF announced that it succeeded in its second attempt to get shareholder approval for big hikes in management fees at many of its funds, including: TIAA-CREF International Equity TIIEX, TIAA-CREF Large-Cap Value TCLCX, TIAA-CREF Small-Cap Equity TCSEX, TIAA-CREF Real Estate Securities TIREX, TIAA-CREF Social Choice Equity TISCX, TIAA-CREF Bond TIBDX, and TIAA-CREF Inflation-Linked Bond TIILX and TIAA-CREF's money market funds.

When first vote was held in July shareholders rejected nearly all of the fee hikes.

TIAA-CREF CEO Herb Allison said in a statement, "The board's action--to give shareholders the facts and let them decide--embodies the transparency and fairness that distinguishes our organization."

We wonder whether Allision, therefore, means shareholders didn't have all the facts in the first time around.

Morningstar fund analyst Christopher Davis says that "this outcome will likely result in a downgrade of TIAA-CREF's Stewardship Grade board score given the board's acquiescence to management. It isn't just the fee hikes themselves, but the complete disregard for shareholder wishes that is particularly galling."

The fee hike takes effect Feb. 1.

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