Fund Times: Artisan to Close Another Successful Fund

Artisan Partners will close  Artisan International Value (ARTKX), effective March 30, 2007. This means that six of the shop's eight retail funds are closed in some form or another. Artisan created this all-cap offering in mid-2002 and hired manager David Samra, formerly of the Oakmark Funds, to run it. Lifted by Samra's stock-picking and the tremendous performance of foreign smaller-cap shares, the fund has gathered $3.5 billion in assets, including retail, institutional, and separate account money. Investors will still be able to access the fund through 401(k) plans, but the close was designed to stem the tide of new money and to allow Samra and his team the flexibility to invest in stocks of all sizes in the future.

Vanguard Launches Newest International Fund
Vanguard's FTSE All-World ex-US Index Fund launches on March 8, 2007. The fund offers broad global exposure to both developed and emerging markets, with the exception of the United States, and its expense ratio is 0.40%. It's also available for an expense ratio of 0.25% as an ETF.

Vanguard Cuts AMT Exposure in Municipal-Bond Funds
Vanguard recently completed the sale of all bonds carrying Alternative Minimum Tax exposure in its 13-fund investment-grade muni bond lineup. Because Vanguard didn't finish the changes until early 2007, income earned in January and February may still be subject to AMT for 2007 tax purposes, for investors who pay this tax. Vanguard will announce more details soon. It will still own bonds subject to AMT in its muni high-yield and muni money market funds.

Specific types of municipal bonds, such as those backing the development of real estate for corporate zoning, may offer slightly higher yield, but they're subject to AMT. So, part of some funds' income may be taxable for certain investors--those who pay AMT. As the percentage of taxpayers subject to AMT grows, many fund families are now adjusting their muni-bond fund lineups to account for this trend. Investors who pay AMT should check a municipal-bond fund's AMT exposure (typically listed as a percentage of fund assets); many muni-bond funds specifically market their AMT-free status, making alternatives easy to find. (Read more about Vanguard in our Vanguard Fund Family Report.)

Fidelity Names New Managers to Several Funds
Fidelity Investments named Stephen M. DuFour portfolio manager of  Fidelity Focused Stock (FTQGX), succeeding Robert J. Haber. We had predicted Haber's departure, as he works for Pyramis, Fidelity's institutional investment division, and the firm is making an effort to separate Pyramis from funds run by Fidelity Management and Research Company. Haber ran the large-blend fund for three years with good overall results. DuFour comes off an unsuccessful six-year stint running  Fidelity Equity Income II (FEQTX), during which time he failed to beat the large-value category average return. His fast-trading style was a bad fit for that fund given its large asset base. His performance was much better when he ran the much smaller Fidelity Advisor Equity Value (FAVAX), which bodes well for Focused Stock, as it has less than $100 million in assets. Still, given DuFour's mixed record and the uncertainty of how his approach will translate to a focused fund, we'd steer clear.

Fidelity also named Gavin Baker successor to Brian J. Younger at several industry-specific funds:  Fidelity Select Wireless (FWRLX),  Fidelity Select Telecommunications (FSTCX), and Fidelity Advisor Telecommunications (FTUAX). This wasn't a surprise either, given that Younger was recently named comanager of  Fidelity Select Financial Services (FIDSX) and running two Select funds in different sectors is highly unusual. Elsewhere on the Select fund lineup, Stavros Koutsantonis succeeded Douglas Simmons on Fidelity Select Environmental (FSLEX) and Vincent Montemaggiore took charge of Fidelity Select Industrial Equipment . He succeeds Chris Bartel, who has become a research director.

Fidelity's Select sector fund lineup tends to be volatile, and continuous manager changes cause uncertainty, not to mention transaction costs. (Read more about Fidelity in our Fidelity Fund Family Report.)

MFS Consolidates Large-Cap, Fixed-Income Lineups
MFS Investment Management announced plans to merge five funds, pending shareholder approval in mid-2007.  MFS Strategic Growth  will merge into MFS Core Growth, a large-growth fund with above-average returns led by long-tenured skipper Steve Pesek. Also among large-growth funds, MFS Growth Opportunities  will merge into  MFS Massachusetts Investors Growth Stock (MIGFX). Large-blend fund  MFS Capital Opportunities  will merge into MFS Core Equity (MRGAX).

Among fixed-income funds,  MFS Municipal Bond  will combine with MFS Municipal Income (MFIAX), and MFS Intermediate Investment Grade Bond  will combine with MFS Research Bond (MRBFX).

These changes reduce overlap in MFS' product lineup. Shareholders will benefit from reduced expenses in most cases. No merger will result in higher fees for shareholders in any fund.

Lots of Changes at Smaller Hartford Fund
 Hartford Focus  will soon look quite different. Francis J. Boggan becomes its manager on March 30, 2007, replacing Steven Irons and Peter Higgins. Boggan has worked at the same subadvisor as Higgins and Irons, Wellington Management, managing mid-growth-style separate accounts since January 2001. During that time, returns at these accounts exceeded the mid-growth category average in each calendar year.

Boggan's role won't be exactly the same here, and this fund's mandate is changing, too: It will now invest primarily in large-cap companies. In addition, its name changes to The Hartford Fundamental Growth Fund. Our recent  Analyst Report offers more detail on the changes.

Oakmark Manager Says Citigroup Bid for Nikko Cordial Too Low
Morningstar's 2006 International-Fund Manager of the Year, David Herro, believes  Citigroup's (C) $11 billion takeover offer for Japanese broker Nikko Cordial is too low. Financial Times reported that Harris's  Oakmark International (OAKIX) owns 7.5% of outstanding Nikko shares and values the firm in excess of $17 billion. Even so, Citi may be able to attain shareholder approval without Oakmark's support, as it needs a majority to approve the bid.

Evergreen Hires Ex-DWS High-Yield Leader
Evergreen Investments hired Andrew Cestone as managing director of Global High Yield investments. Cestone, who previously managed portfolios at both Phoenix Investments and  Bank of America (BAC), succeeds Gary Pzegeo as lead portfolio manager on all Evergreen high-yield bond portfolios. He brings with him several analysts from Deutsche Asset Management, where he most recently was managing director of high-yield fixed-income portfolios.