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Lower Fees for 4 Vanguard Mutual Funds, 1 ETF

Fairholme takes a big stake in Fannie and Freddie preferreds, a manager of a Bronze-rated Oppenheimer fund departs, Templeton Frontier Markets closes to new investors, a slew of manager changes at Bridgeway, and some high-profile Janus fund managers resurface at a hedge fund.

Morningstar Fund Analysts, 05/30/2013

On Tuesday, May 28, Vanguard announced that investors in one of the firm's exchange-traded funds and five of its mutual fund share classes will benefit from lower fees, effective immediately.

Mutual funds Vanguard Dividend Appreciation Index VDAIX, Gold-rated Vanguard Dividend Growth VDIGX, Gold-rated Vanguard Energy Admiral share class VGELX and Investor share class VGENX, and Gold-rated Vanguard Precious Metals and Mining VGPMX all saw expenses fall between 2 and 5 basis points each. Vanguard Dividend Appreciation Index's fee fell to 0.20% from 0.25%, while Vanguard Dividend Growth's expense ratio slid to 0.29% from 0.31%. Vanguard Energy Admiral share class' fee dropped to 0.26% from 0.28%, while Vanguard Energy Investor share class' expense ratio fell to 0.31% from 0.34%. Vanguard Precious Metals and Mining's fee dropped to 0.26% from 0.29%.

Also, the expense ratio of Vanguard Dividend Appreciation ETF VIG fell to 0.10% from 0.13%.

Vanguard operates its funds at cost, so as asset levels rise and/or expenses fall, Vanguard likes to say that it returns any "profits" to its funds' investors in the form of lower fees.

Oppenheimer Manager Departure
Oppenheimer announced that Julie Van Cleave, the lead manager of the $5 billion, Bronze-rated Oppenheimer Capital Appreciation OPTFX, is leaving the firm as of Friday, May 31. Michael Kotlarz, who became her comanager in June 2012 and served as an analyst covering tech stocks for the Oppenheimer growth team for the four years prior, will become the sole portfolio manager of the fund as well as related strategies.

Van Cleave had a pretty good long-term record with her previous funds at Mason Street and DWS. Still, Capital Appreciation has been a mediocre performer since she took over in April 2010, delivering a 13.6% annualized return for the trailing three-year period through May 29, 2013, that ranks in the bottom quartile of the large-growth category.

Looking to Avoid Hard Close, Wasatch Implements More Restrictions on Emerging-Markets Small-Cap Fund
Neutral-rated Wasatch Emerging Markets Small Cap WAEMX has continued to receive significant inflows since implementing a soft close in February 2012, and Wasatch Advisors recently announced further restrictions on purchases of the fund in an effort to avoid a hard close. Effective June 7, individual investors who already own the fund will no longer be able to make additional purchases through Schwab or other platforms, and some--but not all--of the financial advisors who currently use the fund will no longer be able to make additional purchases. Wasatch Advisors has also asked those financial advisors who will retain access to the fund to moderate their purchases. (Existing shareholders who invest directly through Wasatch and current retirement plans will still be able to make additional investments in the fund.)

Templeton Frontier Markets Closes to New Investors
Templeton Frontier Markets TFMAX will close to new investors effective June 28, 2013. The fund will remain open to clients in discretionary investment allocation programs and there will be an option for future investments within 401(k) plans that already utilize the fund. The fund's top-decile performance during the past year no doubt has caught investors' attention, as the fund has received strong inflows throughout the past year, ending April 2013 with more than $1.1 billion in assets.

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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