Harbor Capital Appreciation gets a new comanager, some Vanguard expense ratios fall, Oppenheimer changes a value manager, Vanguard rotates some bond fund managers, a Lord Abbett small-cap blend manager leaves, and more.
BlackRock continued to revamp its equity mutual fund lineup this week by replacing three management teams, including what was left of a U.S.-based energy and natural-resources group that last year attracted unwanted attention for an apparent conflict of interest.
The asset-management firm said it will replace the U.S.-based team that has run the $784 million BlackRock Energy & Resources
For more than a decade, Batchelor and Allonby have run the Bronze-rated BGF New Energy and Silver-rated BGF World Energy funds that are sold in Europe. As of Feb. 26, 2013, both funds had trailed their category averages since inception. New Energy had fallen 3.4% annualized since April 6, 2001, while the average European Alternative Energy fund had slipped less than 1.0%. World Energy had gained 6.9% annualized since then compared with 7.9% for the typical European-based equity energy fund. Since October 2011 Batchelor and Allonby also have been part of the team that runs the still relatively new and unrated BlackRock Commodities Strategies
Last year, the longtime manager of the U.S.-based Energy & Resources and All-Cap Resources funds, Dan Rice, stepped down and eventually left BlackRock after news reports revealed a potential conflict of interest. A natural gas drilling firm that Rice helped start and his sons operated had a joint venture with one of the funds' largest holdings, Alpha Natural Resources
The unrated BlackRock Mid-Cap Growth Equity
BlackRock's San Francisco-based Scientific Active Equity team, which currently runs collective investment trusts, will take over Small Cap Growth Equity from lead manager Andrew Thut and Mid Cap Growth Equity's Leger on May 1. Thut, who had been lead manager since 2008 and a comanager since 2004, will help with the transition but ultimately will leave the firm. This is the second big manager change in six years for this fund, whose trailing one-, three-, and five-year results are all below the category average and Russell 2000 Growth Index. BlackRock's Travis Cooke, who came to the firm with its 2009 acquisition of Barclays Global Investors, will be the fund’s new manager; but the Scientific Equity Team uses a mix of quantitative and fundamental approaches that involves many more people. The fund will remain a growth offering, but it may be more benchmark-conscious and possibly offer a lower expense ratio.
The changes are the latest among many that BlackRock has made to its fundamental equity mutual fund teams. The firm recruited managers from other firms to take over several investment teams and funds in 2012, including BlackRock Capital Appreciation, BlackRock Basic Value
Vanguard Rotates Managers, Changes Leaders at Bond Index Group
Vanguard is rotating five members of its investment management team, continuing the firm's practice of periodically revolving key personnel to expand their experience.
Joseph Brennan, who served in Australia as the firm's Asia Pacific CIO since 2009, will return to the United States to lead Vanguard's Equity Index Group. Brennan, who has spent 12 years with Vanguard, will oversee the investment team responsible for more than 80 domestic and international index funds and exchange-traded funds, representing nearly $1 trillion in assets.
Gregory Davis, who has led the firm's Bond Index Group since 2007, will move into the Asia Pacific CIO role. Davis will oversee Vanguard Australia's investment team, which manages offerings available to Australian and Asian investors. Davis has been removed as a comanager from a number of index funds including Vanguard Total Bond Market Index
Josh Barrickman will assume leadership of the firm's Bond Index Group. A 14-year Vanguard veteran, Barrickman will continue to serve as a comanager on fixed-income index funds such as Vanguard Total Bond Market II Index, Vanguard Intermediate-Term Bond Index
John Ameriks will move from managing the firm's Investment Counseling and Research Group to leading the firm's Active Equity Group, which serves as advisor to Vanguard Strategic Equity
Lord Abbett Small-Cap Blend Manager Departs
Michael Smith, longtime manager of $700 million Lord Abbett Small-Cap Blend
Oppenheimer Replaces Value Manager
Oppenheimer has fired Mitch Williams, manager of Oppenheimer Value
Oppenheimer Value and Small & Mid-Cap Value are both former standout funds that had fallen on hard times recently. Damian had managed Small & Mid-Cap Value since 2001, putting together six years of great results before falling hard in the 2008 bear market; the fund has now trailed its category in four of the past five years, and its asset base has shrunk dramatically. The Value fund had a great track record in eight years under former manager Chris Leavy (now at BlackRock), but its record has been more mixed since Williams took over at the beginning of 2009. Both funds have Morningstar Analyst Ratings of Neutral, though those ratings will be going under review as we evaluate the changes.
Management Changes at Two Invesco Funds
Invesco announced changes to the management team at Invesco Energy
Norman MacDonald will take over management responsibilities for both funds. MacDonald has earned a respectable track record during his five-year tenure as manager of Invesco's Canadian-domiciled Trimark Energy Class and Trimark Resources funds. He will apply the same process to the U.S. funds, searching for companies with low price multiples and production growth.
Vanguard Updates Expense Ratios, Reports More Reductions Than Rises
In February, fees dropped at six Vanguard funds while edging higher at three funds. Vanguard Selected Value
Expense ratios rose by 1 basis point at Vanguard Mid Cap Growth VMGRX and Vanguard International Explorer
Harbor Capital Appreciation Gains Comanager
Harbor Funds has named Kathleen McCarragher comanager of Gold-rated Harbor Capital Appreciation
Associate director of fund analysis Dan Culloton, senior fund analyst David Kathman, and fund analysts Michelle Canavan, Robert Goldsborough, Flynn Murphy, and Kathryn Spica contributed to this report.