Fund Times: Changes at the Top for Fidelity

Stephen Jonas will retire as executive director of Fidelity Management and Research at the end of January. Jonas served in the role for nearly two years as part of his 20-year career at FMR. As executive director, he was responsible for restructuring FMR's investment management operation. In Jonas' place, Walter Donovan becomes president of FMR's Equity Division, Boyce Greer becomes president of FMR's Fixed-Income Division, and Dwight Churchill becomes president of Investment Services. All three are Fidelity veterans.

The large shop also announced a number of manager changes to its funds. Steven Buller replaced Matthew Lentz as manager of  Fidelity International Real Estate (FIREX), but Buller will also remain in his current role as manager of domestic-oriented  Fidelity Real Estate Investment (FRESX).

Among FMR's Select funds lineup, Charlie Chai became portfolio manager of  Fidelity Select Technology (FSPTX), replacing Jim Morrow. Morrow also leaves Fidelity Select IT Services (FBSOX), leaving Benjamin Hesse as the fund's sole skipper. Other Select family funds getting the management shuffle include Fidelity Select Industrials (FCYIX),  Fidelity Select Software and Computer Services (FSCSX), Fidelity Select Paper and Forest Products , and Fidelity Select Transportation (FSRFX).

Shareholders of Select funds should be aware that FMR has historically made frequent changes to the managers of this lineup, despite the management and strategy instability that sometimes results. Those who succeed in their roles at these niche offerings, however, sometimes advance to become managers of the firm's more widely diversified offerings. (Read more about Fidelity  in our Fidelity Fund Family Report.)

Vanguard Shuffles a Few Subadvisors at Two Large-Cap Funds
 Vanguard Windsor II (VWNFX) and  Vanguard Morgan Growth  are undergoing minor changes. The company added Jennison Associates to a group of subadvisors at Morgan Growth. Kathleen McCarragher will manage Jennison's sleeve of assets. McCarragher is part of the experienced management team that leads  Jennison Growth (PJFAX), a fund on which she's worked as manager since 1999.

The company's second lineup shuffle was its replacement of two subadvisors--Equinox Capital and Tukman Capital--on Windsor II. Newcomer Lazard Asset Management replaces them and will manage most of the assets Equinox and Tukman ran. Andrew Lacey and Christopher Blake lead the Lazard team. While Lacey and Blake's tenure at Lazard U.S. Equity Value (LEVOX)--another large-value offering--is quite short, they've established a longer record at  Lazard Mid Cap Open . (Read more about Vanguard in our Vanguard Fund Family Report.)

PIMCO Plans Another Diversified Bond Fund
PIMCO recently announced its newest offering, PIMCO Income Fund. The fund isn't available yet, nor has PIMCO named its manager. When that person takes charge here, however, he or she will have a high level of flexibility. The new offering will invest in junk- and investment-grade corporate bonds, government-issued securities, currencies, and mortgage-backed issues from across the globe, including emerging markets.

Longtime Manager of Heritage Fund Steps Down
Jim Awad is stepping down from duties at  Heritage Small Cap Stock (HRSCX). Awad was the fund's longest-tenured manager, serving since 1993. John McPherson and David Adams, both newcomers to Awad Asset Management, will take over. Heritage Small Cap Stock's other subadvisor, Bert Boksen, remains with the fund.

Adams and McPherson came from Pioneer Asset Management, where they managed  Pioneer Small Cap Value  quite successfully. In nearly 10 years as comanagers there, they outperformed more than 70% of their small-blend rivals.

Goldman, Heritage Funds Lose Veteran Investor
Herb Ehlers retired as manager of  Heritage Capital Appreciation (HRCPX) and Goldman Sachs' growth-oriented funds. The 20-member team Ehlers led remains in place and won't change its strategy. Like many investors, it seeks firms with high returns on equity and sustainable competitive advantages.

AXA Board Approves Merger of Growth Fund
The same team Herb Ehlers led at Goldman Sachs will soon get more assets.  AXA Enterprise Growth  will merge its $1.1 billion asset base into  Goldman Sachs Capital Growth (GSCGX). The change comes as Enterprise Growth's longtime manager, Ron Canakaris of subadvisor Montag and Caldwell, had struggled to post better-than-average results in recent years versus large-growth rivals.

Mutual Series Announces Manager Shuffle
Manager Todd Jonasz is leaving  Mutual Financial Services . Comanager Charles Lahr remains. Lahr will step down as comanager at both  Mutual Beacon (TEBIX) and  Mutual European (TEMIX) but will join the  Mutual Discovery (TEDIX) team.

Analyst Katrina Dudley was also promoted to assistant portfolio manager, assisting Philippe Brugere-Trelat at Mutual European.

Evergreen Funds to Buy European Credit Management
Evergreen Funds, the Wachovia-owned investment shop, recently announced plans to buy a majority stake in privately held, European fixed-income specialist European Credit Management. The deal should increase Evergreen's asset base by about $26 billion, to nearly $280 billion.