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Oakmark Select Comanager to Retire

College savings just got a lot cheaper and more.  

Morningstar Fund Analysts, 05/10/2012

Henry Berghoef, comanager of the Gold-rated large-blend fund Oakmark Select OAKLX, plans to retire at the end of July. Berghoef has assisted lead manager Bill Nygren, who will continue to run the fund, since 2000. He also served as director of U.S. research for Oakmark's parent company, Harris Associates, from 2003 through 2011. The firm plans to name Berghoef's successor by May 2013.  

Despite Berghoef's upcoming departure, the fund retains its Morningstar Analyst Rating of Gold. That's thanks to Nygren's strong record here and at his other funds, Oakmark OAKMX and Oakmark Global Select OAKWX. It's also thanks to the strong, fundamentals-driven process that powers all of Oakmark's offerings, which should also help minimize the disruption of Berghoef's departure. The team relies purely on bottom-up analysis and stringent valuation work to assemble a list of approved stocks used by every manager at the firm. Nygren's penchant for taking large positions in high-conviction picks has led to above-average volatility over the years, but he and his team have been right more often than not.  As of May 7, 2012, the fund landed in the top quartile of its category for every trailing period three years and longer and had the highest 15-year return of any fund in its category.

New York Direct-Sold 529 Plan Drops Fees 
College savers take note: New York's direct-sold 529 plan just became the cheapest of any nationally available plan. On May 7, 2012, New York announced all of the plan's investment options dropped each of their total expense ratios to 0.17% from the previous price of 0.25%. Vanguard serves as the plan's investment manager, and with the fees now at 0.17%, the plan's expenses are roughly in line with those charged by the Gold-rated Vanguard Target Retirement series of mutual funds. 529 plan investment options have typically been more expensive than their mutual fund counterparts, such as target-date funds. The fee cuts were part of a new, 7-year contract agreement between Vanguard, Upromise Investments (the plan's program manager), and the state of New York. The plan has over $11 billion in assets and is the largest direct-sold plan in the nation.

New York has a second advisor-sold 529 plan that has also undergone some changes. Last year, the state announced that JP Morgan Asset Management would take over as investment manager, replacing Columbia Management. On May 7, 2012, the assets in the plan officially transitioned to JPMorgan. As part of the management change, the plan was renamed New York's 529 Advisor-Guided College Savings Program. It includes one age-based option, seven static asset-allocation portfolios, and 16 static portfolios. Most of the underlying investments are managed by JP Morgan with a few SPDR exchange-traded funds included as well. The age-based option is run by the same management team that oversees the Silver-rated JPMorgan SmartRetirement series of mutual funds.

Tradewinds Reopens Funds, Shifts Managers 
Tradewinds Global Investors, a subsidiary of Nuveen Investments, has reopened
Nuveen Tradewinds Global All-Cap NWGAX and Nuveen Tradewinds Value Opportunities NVOAX after the two offerings experienced large outflows. Investors have been pulling their money from Tradewinds in the wake of the mid-March 2012 resignation of David Iben, the firm's co-president, chief investment officer, and the driving force behind its stock-picking strategy. He is leaving the firm in June to join Vinik Asset Management and will be taking three portfolio managers with him. Since the announcement, the funds, which had been closed since August 2011, have lost one third of their total assets. Similarly, ING Value Choice PAVAX, which Tradewinds subadvises, is now open to new investors.

Tradewinds also recently announced that Emily Alejos and Drew Thelen will now run Nuveen Tradewinds Global Resources NTGAX. The fund previously was run by Iben, Alberto Jimenez Crespo, and Gregory Padilla. (Crespo and Padilla are two of the managers following Iben to Vinik Asset Management.) Alejos and Thelen became the firm's co-CIOs following Iben's announcement and took over Global All-Cap at that time, too. Alejos continues to comanage Nuveen Tradewinds Emerging Markets NTEAX, and Thelen still manages Nuveen Tradewinds Small-Cap Opportunities NTSAX.

Institutional investors are still concerned about the departures at Tradewinds. Russell announced this week that it removed Tradewinds as a subadvisor from
Russell Global Equity RGEAX and added Polaris Capital Management to the fund. The fund's five other subadvisors remain on board. 

Pioneer CEO Steps Down
Pioneer Investments CEO Roger Yates is stepping down, according to a news release from the firm's parent, UniCredit Group. Yates will be replaced by Sandro Pierri, pending approval by Pioneer’s board of directors in July. Pierri joined Pioneer in 2003 and most recently served as head of Pioneer's Western Europe and international operations, and CEO of Pioneer Investments, Italy.

For his part, Yates had an eventful two-and-a-half year turn as CEO. After joining the firm in 2009, Yates played an integral role in the firm's strategic review that many observers thought would result in a sale of the firm. UniCredit ultimately opted not to sell Pioneer, and earlier this year Yates formally announced Pioneer's plan to embark on a five-year growth plan. However, Yates likely didn't win any favors at UniCredit in February when he told the press: "The ability of banks to screw up fund managers is legendary. We’ve just got to make sure we have sufficient independence." Yates will remain on Pioneer Investments' board as a nonexecutive director.

Columbia Shuffles Manager Ranks 
Columbia has replaced the management team at the free-ranging Columbia Strategic Investor CSVAX after it posted a lackluster record the past several years. Comanagers Emil Gjester and Jonas Patrikson have stepped down and will leave the firm in the summer while Michael Welter will remain at Columbia as an analyst. New managers Steven Schroll, Laton Spahr, and Paul Stocking have produced decent results running six funds, including Columbia Dividend Opportunity INUTXColumbia Diversified Equity Income INDZX, and Columbia Mid Cap Value Opportunity AMVAX.

However, of the six funds the new managers oversee, all but one of them focuses on mid- and large-cap value stocks. (The one exception is the large-blend Columbia 120/20 Contrarian Equity RCEAX.) Columbia Strategic Investor historically has shifted across styles and market capitalizations based on where the managers found the best investment opportunities. In 2001, for instance, the fund's portfolio placed it in the mid-cap value category, whereas more recently the fund has landed in the large-growth category. While Columbia intends to keep the fund's flexible approach, considering the new management team's value bias and dividend focus at their other funds, its unlikely Columbia Strategic Investor will venture as much into growth stocks going forward. 

Artisan Goes Global (Again)
Artisan Growth Opportunities
ARTRX is getting a name change. The fund, which was launched in 2008, will be rebranded Artisan Global Opportunities to reflect its increasing international exposure. (Foreign stocks now account for 34% of assets, up from 11% in early 2009.) The name change also follows a broader trend at the firm. Artisan has launched two other global offerings the past five years. 

Heartland Manager Steps Down
Heartland Select Value
HRSVX comanager Hugh Denison has stepped down from the fund as of May 1, 2012. The move was widely expected in advance of his pending retirement. Denison was one of Heartland's original employees, serving in various positions over 25 years. During the past two years, though, he had been more of an advisor and mentor to the firm's younger analysts and portfolio managers. He remains at Heartland as part of the investment team and will also work on client relationships. His departure from Select Value isn't a detractor. The fund's comanagers remain in place and will continue running the same strategy that has landed this fund in the top 15% of the small-value category the past 15 years. 

Madison Founder Steps Down
Madison Investment Advisors, the parent firm of the Madison Mosaic Funds, announced Frank Burgess, its founder, is stepping down from his CEO role. The firm's current management team is still in place. Burgess will remain at the firm and will continue to help run its covered-call fund. 

Etc.
Y. Dogan Sahin has stepped down as a comanager at Franklin Small Cap Value FRVLX after five years at the helm. The fund's four comanagers, who have helped run the fund since its 1996 inception, remain in place.

AllianceBernstein Greater China '97 GCHAX will be liquidated in early June. The $34 million fund has experienced several recent manager departures and more or less steady outflows since 2009.

Tad Rivelle, TCW's chief investment officer of fixed income, has replaced Claude Erb as a comanager on TCW Enhanced Commodity Strategy TGGWX. Current comanagers Steven Kane and Bret Barker remain on board.

Goldman Sachs Ultra-Short Duration Government GSARX is getting a new name and a new mandate. Starting July 27, 2012, the fund will no longer invest primarily in fixed-rate U.S. government securities, but instead will keep 80% of assets in floating-rate securities of both the United States and foreign governments. Its name will change to Goldman Sachs High Quality Floating Rate to reflect the strategy shift.

Neuberger Berman is launching Neuberger Berman Short Duration High Income, a short-term bond fund that will invest primarily in junk bonds and high-yield floating-rate securities. 

Dreyfus has added Vulcan Value Partners as a sixth subadvisor for Dreyfus Select Managers Small Cap Value DMVAX. Vulcan portfolio manager C.T. Fitzpatrick will run management of Vulcan's 10% portion of the fund's assets.

Bishop Street Government Money Market will liquidate at the end of June.  


Mutual fund analysts David Falkof, Shannon Kirwin, and Rob Wherry contributed to this report.

Morningstar fund analysts cover more than 1,700 mutual funds and write regular commentary covering fund industry news, fund investing trends, picks, portfolio planning, international investing, and more.

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