Fund Times: Manager Change at Fidelity New Millennium

According to a June 14 Fidelity Investments press release, Fidelity sector fund manager John Roth will take over management of $3.3 billion  Fidelity New Millennium (FMILX), succeeding Neal Miller, who has run the offering since late 1992. Since 2004, Roth has managed both the Fidelity Select Consumer Industries (FSCPX) and Fidelity Advisor Consumer Industries (FCNAX) funds. Formerly, he was manager at  Fidelity Select Utilities Growth (FSUTX) (1999 to 2002) and Fidelity Select Chemicals Portfolio (FSCHX) (2002 to 2004). It remains to be seen how Roth's stock-picking style will change the look of the fund, as Miller's free-ranging and eclectic management style is not easily replicable.

Martin Zinny and Robert Lee have been named co-portfolio managers on Roth's former charges, Fidelity Select Consumer Industries and Fidelity Advisor Consumer Industries. Both joined Fidelity in 2001, as equity research analysts.

Neuberger Berman International Fund to Close
Neuberger Berman Management Inc. will close  Neuberger Berman International  to new investors on July 31, 2006, now that the fund is approaching $2 billion in assets. Existing investors will be able to continue to make purchases in their accounts. We're encouraged by this move to control asset size, because this fund's all-cap blend strategy, while flexible, could be hampered if assets were to get out of control.

ING Group Continues to See Scandal
Scandal continues to plague Dutch insurer ING Group, according to two separate Wall Street Journal reports. First, in a complaint filed recently in New Hampshire, the firm's internal e-mail communications allegedly indicate that several ING employees were aware of extensive market-timing in funds run by the firm, as early as 2001.

Second, the Journal reported that an investigation by New York Attorney General Eliot Spitzer had uncovered an arrangement between a unit of ING and a division of the New York State United Teachers Union. Apparently, union affiliated officials received "payments of several million dollars a year� in exchange for the union's endorsement of ING products and providing ING access to its members," according to the Journal. As we have suggested in the past, investors should proceed with caution when considering ING funds, as the firm has shown itself to be an uneven steward of investors' interests.

Fidelity to Restructure Sector Fund Lineup
Fidelity Investments announced on June 15, 2006, that it plans to give nearly its entire lineup of Select and Advisor Focus sector funds new benchmark indexes. A few funds also will change names. Fidelity is switching to MSCI, which offers an index to match nearly every sector and industry fund in the lineup. One positive result of the change is that investors will now be able to more accurately measure the performance of these funds. With 58 distinct sector or industry funds, we certainly think that a greater focus on accurate benchmarking is a positive step. We've been critical of these funds' high manager turnover and narrow focus.

RiverSource Announces New Municipal Team Leader
As part of the continuing reorganization of its municipal-bond lineup, RiverSource Investments, a unit of Ameriprise Financial, has hired Richard LaCoff to serve as municipal sector team leader. LaCoff replaces David Kerwin has head of the group, and as lead manager on nine tax-exempt mutual funds, including the $3.3 billion  RiverSource Tax-Exempt High Income . Kerwin will continue as a senior member of the team, however. Previously, LaCoff worked as head of municipal-bond strategies and trading at Payden and Rygel Investments, and before that at the Vanguard Group.

Thornburg to Merge Florida Municipal Fund
Thornburg Investment Management plans to merge the $46 million Thornburg Florida Intermediate Municipal  into the $465 million national  Thornburg Intermediate Municipal (THIMX), if shareholders approve, according to a recent SEC filing. George Strickland currently runs both funds, so Florida Fund shareholders will not see a change in management due to the merger. They may see lower costs however, because the filing suggested that: "Fees and expenses of the National Fund are expected to be lower than those of the Florida Fund as a result of the reorganization." This would be welcome news, as currently both funds charge a hefty 0.99% expense ratio. We've generally liked the approach Strickland takes at this muni national intermediate category offering, but we've wanted fees to come down here for a while.

Nuveen Launches Three New Bond Funds
Last week Nuveen Investments announced the launch of three new offerings in its fixed-income lineup. The new funds are: Nuveen Short Duration Bond, Nuveen Core Bond, and Nuveen High Yield Bond. Nuveen's Los Angeles-based Taxable Fixed Income group, headed by Andrew Stenwall, will run the new funds. Stenwall has previously worked in the fixed-income divisions at Banc of America Capital Management, Lazard Freres Asset Management, and Lehman Brothers.

Management Changes at Columbia
There have been a couple departures and changes of note to the management of the Columbia Advisors fund group. Brenda Furlong is leaving as head of Columbia's fixed-income department. Steve Peacher, who is head of the taxable-bond group, but will now oversee the municipal group as well, will replace her. On the equity side, Roger Sayler, who has been in charge of the indexing and enhanced indexing teams is leaving, and Colin Moore, who already oversaw most of the equity group, will take the lead here.