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Vanguard Metals and Mining Fund's Manager Departs

Graham French, who had managed Vanguard Precious Metals and Mining since 1996, steps back from day-to-day fund management responsibilities at the fund's subadvisor. Also, one fewer manager on PIMCO Global Multi-Asset and new managers on a DWS EAFE index fund.

Morningstar Fund Analysts, 11/21/2013

On Nov. 19, Graham French, the longtime manager of Vanguard Precious Metals and Mining VGPMX, stepped down from daily fund management responsibilities at the fund's subadvisor, M&G Investment Management.

French, who had been the fund's lead manager since 1996, has worked at London-based M&G Investment Management since 1989. Morningstar U.K. named him the Global Equity Manager of the Year in 2011, calling him "a truly skilled manager who is clearly passionate about delivering excellent long-term returns to his investors."

French's performance managing the Vanguard precious metals and mining fund had been especially strong over the past 12-month and three-year period, ranking as the top performer in the equity precious metals category. While the typical peer focuses mainly on gold-related stocks, this fund's exposure to a wide variety of commodity producers insulated it from a severe downturn in gold.

French's replacement on the Vanguard fund is his former deputy manager Randeep Somel, who joined M&G Investment Management in 2005. Somel then became a dedicated fund analyst on the Vanguard fund in 2008 before graduating to deputy fund manager in 2010. (Somel was formally promoted to be a named manager in May 2013.) We don't expect drastic changes to the process in the near term, as Somel has been closely involved in the research and management of the portfolio over the past few years. Aside from managing Vanguard Precious Metals and Mining, Somel will also assume lead portfolio manager responsibilities for M&G Global Basics and M&G Managed Growth.

With this manager change, we have placed the fund's Analyst Rating Under Review.

Seeking More Focus From El-Erian, PIMCO Tightens Manager Team on PIMCO Global Multi-Asset
PIMCO this week announced that Saumil Parikh, a comanager for the past year-plus on PIMCO Global Multi-Asset PGAIX, is stepping off the $3 billion fund as of Nov. 30.

PIMCO is making the change to try to boost the fund's performance, which has been poor. With the change, PIMCO is seeking to have the fund's lead manager, Mohamed El-Erian, focus more of his efforts on managing the fund. To do so, El-Erian will be relinquishing some of his duties managing separate accounts using the total return strategy and will take more of a hands-on role on some of the day-to-day activities on the fund that Parikh had been handling. Parikh, who has been with PIMCO since 2000, will be taking over some of the total return separate accounts that El-Erian had been handling and will retain several key responsibilities at the firm, including his participation on its investment committee.

The other comanagers on the fund are Vineer Bhansali, who oversees tail-risk hedging, and Curtis Mewbourne, who handles security selection. El-Erian historically had handled asset allocation and big-picture issues on the fund.

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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