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Investing in Future, Oakmark Select Adds 2 Comanagers

DWS announced that it is dropping the name of subadvisor Dreman from three mutual funds, while Vanguard removed Hansberger from a team of subadvisors running Vanguard International Value.

Morningstar Fund Analysts, 01/17/2013

Harris Associates has announced that two comanagers will be joining the Gold-rated Oakmark Select OAKLX alongside longtime steward Bill Nygren. Win Murray, Harris Associates' director of U.S. equity research, and senior research analyst Tony Coniaris will officially join Nygren in running the large-cap blend fund on Jan. 28.

The announcement was not unexpected. On July 31, 2012, longtime comanager Henry Berghoef, who had assisted Nygren in managing the fund since 2000, stepped down. Harris stated at the time that it planned to appoint a successor by May 2013.

It's likely that the two new comanagers will act primarily as assistant managers to Nygren for now. That means that investors shouldn't expect a change to the contrarian and concentrated style that has driven the fund's appeal and impressive long-term record. (The fund's annualized 15-year return of 9.0% tops all but one competitor in Morningstar's large-cap blend category.)

Still, Nygren emphasized that the decision to add Murray and Coniaris was made with an eye to the fund's long-term stewardship. In a statement, he said, "While I expect to be at Oakmark for many more years, we need to think about succession for the funds ... Win and Tony are both younger than I am, and bringing them in as co-managers now will ensure investment continuity for Select far into the future."

Legg Mason to Combine Operations of LMCM and ClearBridge
Click here to see our special Fund Times item from Wednesday about Legg Mason's plans to bring together the operations of two of its investment unit subsidiaries, ClearBridge Investments and Legg Mason Capital Management. While the move is not expected to have an immediate impact on any existing ClearBridge or Legg Mason Capital Management mutual funds, it's noteworthy that legendary Legg Mason Capital Management portfolio manager Bill Miller will not be becoming part of ClearBridge.

DWS Drops Dreman Name, Global Thematic Account
DWS is changing the names of its three Dreman Value Management-run funds, including the Neutral-rated DWS Dreman Small Cap Value KDSAX, to drop the subadvisor's name. Dreman's assets under management have shrunk dramatically to just $4.1 billion today from $20 billion in 2007. The firm previously subadvised a large-cap value fund for DWS but was dropped after that fund (now called DWS Equity Dividend KDHAX) lost 46% in 2008, leading to massive outflows. The three funds Dreman subadvises for DWS now account for roughly half of the firm's total assets under management.

Meanwhile, DWS announced a management change at DWS Global Thematic SGQAX effective Jan. 31, at which point its name will change to DWS Global Growth. The firm is replacing manager Oliver Kratz and his firm, Global Thematic Partners, with an in-house team. When Kratz began running the fund in August 2003, he worked directly for the fund's advisor, Deutsche Asset Management, but in 2010 he and his entire analyst team left Deutsche to start Global Thematic Partners, continuing to run this fund on a subadvisory basis. Though his theme-based approach led to category-topping returns in 2005 and 2006, the fund has had inconsistent performance since then. The fund's new leadership combines three members of its New York-based global small-cap team with the Frankfurt-based global growth team behind DWS Top 50 Welt, a fund offered to European investors. The lead manager will be Joseph Axtell, manager of DWS Global Small Cap Growth KGDAX.

Longtime Thornburg Manager Retires
George Strickland, portfolio manager of the 3-star Thornburg Strategic Income TSIAX, will be retiring from Thornburg after 21 years of employment effective Feb. 1, 2013. Jason Brady, his co-portfolio manager since the fund's 2007 inception, will remain on board and there are no plans to add to the portfolio management team at this time. Strickland is a managing director of the firm and was also co-portfolio manager of the Thornburg Municipal Bond Strategies until 2010.

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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