Fund Times: Two Funds Make Comeback, iShares Cuts Fees
Plus, California taps Fidelity, Vanguard adds third subadvisor to Global Fund.
Two small-cap funds that have produced abysmal performance in recent years are finally enjoying a moment in the sun. ICM/Isabelle Small Cap Value (IZZYX) has gained a nifty 16.5% for the year to date--that's nearly double the typical small-cap value fund's returns. Meanwhile, Van Wagoner Emerging Growth (VWEGX) is up a cool 20% this year.
At Van Wagoner, it's much easier to pinpoint the source of its success. The fund's massive bet on tech hardware, specifically telecom equipment, has finally produced a nice gain.
For proof of just how bad things have been for both these funds, check out their long-term records. Their great starts haven't been enough to lift them out of the cellar for their categories over the long haul. We wouldn't rush to invest in either of these wild and woolly funds.
Barclays Cuts Expense Ratios on iShares Sector Funds
Responding to lower-cost ETFs offered by Vanguard's VIPERs and State Street Global Advisors' SPDRs, Barclays announced that it is cutting the expense ratio on 25 iShares sector funds. Effective May 1 expenses will go from 0.60% to 0.48%.
Barclays also announced plans to launch 10 new ETFs based on Dow Jones Subsectors. The funds will be launched in May and will also charge 0.48%.
Despite the cuts, the iShares still cost more than comparable funds offered by Vanguard and SPDRs, which cost 0.26%.
A Big Win for Fidelity
California's 529 plan is firing TIAA-CREF and replacing it with Fidelity, according to published reports. The move makes sense as TIAA-CREF's actively managed funds have been unimpressive and its index funds cost more than those offered by Fidelity. In addition, TIAA-CREF has moved to raise its expense ratios, while Fidelity has cut those of some of its index funds and bond funds.
North Carolina Adds Vanguard to 529 Lineup
North Carolina just improved its 529 options by adding a new suite of Vanguard funds to be administered by Upromise.
Vanguard will add 10 diversified investment options to the N.C. 529 plan with an all-inclusive low annual cost of 0.75%. The Vanguard investments include three age-based options designed for investors who prefer a simple, professionally managed college savings program.
Vanguard Adds AllianceBernstein to Global Fund Lineup
Vanguard has hired AllianceBernstein L.P. to run a portion of the $3.5 billion Vanguard Global Equity Fund (VHGEX), joining Marathon Asset Management, LLP and Acadian Asset Management, Inc.
To minimize the tax impact to shareholders, Vanguard will direct a portion of the fund's current cash position to AllianceBernstein, along with the majority of its net new cash inflow. Vanguard does not expect any capital gains to be distributed to shareholders as a result of the broadening of the fund's investment advisory team.
Vanguard said the change will not "have a significant impact on the fund's 0.80% expense ratio."
Franklin Plans to Launch Balanced Fund
Franklin has filed with the SEC plans to launch a new fund named Franklin Balanced Fund. The fund will invest in a mix of stocks, bonds, and convertible securities. The fund will invest at least one fourth of its assets in fixed-income securities. Franklin said it can invest up to 30% overseas but typically won't invest more than 15% outside the United States.
The fund will initially charge an expense ratio of 1.06% on its A shares. The fund will be run by lead manager Ed Perks and comanagers Alan Muschott and Shawn Lyons.
Lash Leaves Engemann
Phoenix Funds reported in SEC filings that Engemann CIO Gretchen Lash left the firm. Phoenix has announced plans to fire Engemann from its fund lineup pending shareholder approval.
Russel Kinnel does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.