Fund Times: Veteran Vanguard Bond Skipper to Retire

This year will mark the end of an era for a two Vanguard bond funds and a balanced fund. Vanguard announced today that manager Earl McEvoy will retire from Wellington Management, subadvisor to the funds, on June 30, capping a distinguished career with the Boston-based firm that spanned three decades. McEvoy has led the efforts on  Vanguard High-Yield Corporate (VWEHX) for more than 20 years and  Vanguard Long-Term Investment-Grade (VWESX) for more than a decade. His tenure running the bond portion of  Vanguard Wellesley Income (VWINX) spans a quarter of a century, and his departure coincides with the previously announced departure of the fund's seasoned stock-picker, Jack Ryan.

McEvoy will undoubtedly be missed--shareholders have long benefited from his knowledge and discipline--but we are confident that the funds will remain in capable hands. John Keogh, who has worked with McEvoy on Wellesley Income for the past three years and managed  Vanguard Wellington's (VWELX) bond portfolio for nearly as long, will take over McEvoy's duties at this conservative-allocation fund. Mike Hong, who has been with Wellington for a decade as a credit researcher and, in the past several years, a portfolio manager working closely with McEvoy, will take over High-Yield Corporate. Finally, Lucius T. Hill, a 25-year bond industry veteran who spent the last 15 years at Wellington, will fill the void at Long-Term Investment-Grade.

We're confident that Wellington will handle these transitions smoothly, as they have in the past, and we don't expect the strategies at any of these well-run funds to change.

Funds Feel Effect of Putnam Shakeup
As anticipated, a recent shakeup in the executive ranks at Putnam Investments has caused some management shuffling at the firm's funds. The recent departures of Josh Brooks, head of Putnam's large-cap equities team, and Kelly Morgan, who helmed the firm's stock research and large-growth efforts, left personnel holes at a number of the firm's offerings. Jeff Knight and Robert Schoen, from Putnam's asset-allocation team, have since hopped on board large-growth offerings  Putnam Voyager  and  Putnam Growth Opportunities (POGAX), replacing Morgan and quant strategist Richard Ginsberg, who was let go along with Morgan in January. In addition, Knight stepped in for Ginsberg on mid-growth offering  Putnam Discovery Growth , although he'll supplement the efforts of manager Richard Weed and comanager Raymond Haddad who remain on board. All three funds have earned the dubious distinction of 1 star under the Morningstar Rating.

At Putnam, uncertainty mounts. In 2005, Brooks and Morgan were tasked to revamp the firm's ailing large-cap lineup. When the duo couldn't manage a turnaround, Putnam scrapped the efforts and went back to the drawing board. The firm continues to search for Brooks' and Morgan's replacements. In the meantime, key investment roles remain unfilled.

Going Public
Undeterred by a rocky stock market, Swiss bank Julius Baer Holdings announced plans to take its U.S. investment management business public in 2008. Julius Baer Americas, parent to asset-management arm Julius Investment Management, filed a statement with the SEC this week proposing an initial public offering. In the mutual fund realm, Julius Baer is most recognized for their $22.6 billion large-cap foreign-equity offering,  Julius Baer International Equity (BJBIX).

In a move that could send classicists scrambling for their lexicons, the firm will take the name Artio Global Management if the offering is successful. Artio is also the name of a Gallo-Roman goddess derived from the Gaulish word "artos," meaning bear.

TCW Fund Loses Comanager
Los Angeles-based TCW Funds announced that portfolio manager Steve Burlingame has left the firm after seven years, leaving the firm's large-growth offering,  TCW Select Equities (TGCEX), in the sole hands of comanager Craig Blum. The fund has struggled since Blum and Burlingame took it over at the start of 2005, but we think dry spells are a natural consequence of the pair's long-term orientation and high-conviction approach, which has merit. We don't expect Blum to make any significant modifications to this strategy now that Burlingame is gone.

Burlingame's departure will also impact  Masters Select Equity (MSEFX), a Morningstar Fund Analyst Pick in the large-blend category. Burlingame, with Blum, ran a slice of the fund's portfolio alongside five other subadvisors with disparate styles. Given Blum's continued presence and the fund's otherwise talent roster, we remain confident in this offering.

World-Stock Fund to Shutter Doors
On April 15,  Evergreen Global Opportunities (EKGAX), which has amassed just over $600 million in assets, will close to new investors. Because managers Francis Claro and Donald Bisson like to fill this portfolio with smaller, fast-growing companies, we think the fund's closing is a sensible move. An unwieldy asset base can limit the team's ability to establish meaningful positions in such names. At the same time, investors tempted by the fund's strong performance should carefully weigh the risks of its aggressive, growth-oriented approach before rushing in.

Tennessee Fold 'Em
A chapter will close on the short, happy life of a Tennessee muni fund. A year and a half after its launch, Goldman Sachs Tennessee Municipal  will close shop and liquidate by the end of February, returning its $62 million in assets to shareholders.