Fund Times: Japan Fund Board at It Again
Plus, changes at Oppenheimer, Fidelity, and more.
Plus, changes at Oppenheimer, Fidelity, and more.
For the second time in its history, the board of Japan Fund has decided to take the fund's business elsewhere. If shareholders approve the proposal, the fund's advisory contract will shift from Fidelity to Nomura Asset Management. This type of move is rarely witnessed in the mutual fund industry, but this board's done it before. It took a similar step in 2002, when the fund's longtime advisor, Zurich Scudder, was taken over by Deutsche Bank. In the spring of that year, a team from Deutsche Asset Management replaced the Scudder manager, who had run the fund since 1988 and was responsible for its stellar long-term record. A few months later, the fund's board awarded the advisor contract to Fidelity, and the move was approved by shareholders in October 2002. It's unclear what the advisor shift means for this fund's future, but shareholders will vote on the proposal in August.
Veteran Oppenheimer Quant Manager Retires
Nikolaos Monoyios, head of Oppenheimer's Main Street team, will retire on June 30. Monoyios comanages the team's three quant-driven funds: Oppenheimer Main Street (MSIGX), Main Street Small Cap (OPMSX), and Main Street Opportunity (OMSOX). Monoyios worked for more than 20 years with former comanager Chuck Albers, first at Guardian Park Avenue, where they pioneered the funds' quantitative approach, and then here until Albers' retirement at the end of 2003.
It's a loss whenever that much experience walks out the door, but we think the funds remain in capable hands. Comanagers Mark Zavanelli and Mark Reinganum have been an integral part of the team since 1998 and 2002, respectively, and are deeply familiar with the funds' quantitative approach. Both will now be listed as comanagers on all three funds. Alex Zhou, who has been involved with the team's quantitative models since joining Oppenheimer in 1999, will also comanage the Main Street fund.
Fidelity's Management Revolving Door
For the second time in 2008, Fidelity's shuffling managers at Fidelity International Small Cap (FISMX). Tokuya Sano, who was responsible for the fund's investments in Japan, is out, and Noriko Takahashi is in. Sano has comanaged this fund since its 2002 launch, and with his departure, none of the fund's original managers remain on board. In April, Fidelity replaced Ben Paton, who had overseen the fund's European slice since January 2004, with Colin Stone. Wilson Wong, who joined the fund in 2005 and runs its Asia ex-Japan stake, is now the senior member of the team.
At Fidelity Select Banking (FSRBX), Vincent Montemaggiore has taken over for Ramona Persaud. Persaud will be sticking with the firm, relocating to London where she'll support manager Bill Bower as a research analyst on Fidelity Diversified International (FDIVX). Montemaggiore joined Fidelity's equity research department in 2005, and he managed Fidelity Select Industrial Equipment from 2007 until 2008, only recently picking up coverage of banks.
Legg Mason Partners to Merge One Fund Away, Grow Another in Its Place
Legg Mason Partners announced plans to launch a new dividend-focused fund under the name Equity Income Builder. Hersh Cohen, CIO of Clearbridge Advisors (subadvisor to the Legg Mason Partners fund lineup), will run the proposed fund along with comanager Peter Vanderlee. Cohen has delivered impressive long-term results over his nearly 30-year history running Legg Mason Partners Appreciation (SHAPX). Over that stretch, the fund has gained an average of 13.6% a year, beating the S&P 500 by roughly 1% annually. The fund's 10-year record also lands in the large-blend category's top quintile. Vanderlee joined the management team at Legg Mason Partners Dividend Strategy in December 2007, after working alongside his comanager Scott Glasser for 10 years as a research analyst and separate-account portfolio manager.
Dividend-paying stocks will take up a large chunk of the fund, and the Cohen and Vanderlee will have the flexibility to invest up to half its portfolio in international stocks, and another 25% in fixed-income securities. The proposed price tag of 1.35% on the fund's A shares is high relative to domestic broker-sold large-cap offerings, but it's on the cheap side compared with similarly distributed world stock funds.
The firm also announced plans to merge Legg Mason Partners Classic Values into the all-cap Legg Mason Partners Capital . Classic Values was run by Robert Olstein of subadvisor Olstein Capital Management since its launch in 2004, but it failed to produce a competitive record during his tenure, and the fund's assets recently dwindled below $100 million. Brian Posner and Brian Angerame had run the acquiring fund together since July 2006, but Posner left the fund when he stepped down as ClearBridge's co-CIO in March. In Posner's absence, Angerame was joined by comanager Derek Deutsch at the end of April. Shareholders will vote on the merger in mid-July. It looks like shareholders in Classic Values will benefit from some economies of scale if the merger goes through. The fund's 1.47% expense ratio will drop to an estimated 0.97%, an attractive price for a broker-sold large-cap fund.
DWS Funds to Merge
Without wasting any time, Deutsche Asset Management is proposing to merge large-blend offering DWS Equity Partners into its large-value sibling DWS Large Cap Value . Until recently, Equity Partners was run by a team from Baltimore-based subadvisor Alex. Brown Investment Management, which also managed DWS Value Builder and DWS Communications (TISHX). Deutsche replaced Alex. Brown on all three funds in March 2008, after all they were stung by sizable bets on stocks like Countrywide Financial that were at the center of the housing crisis.
Frankfurt-based Thomas Schuessler, who has managed Large Cap Value since February 2007, took control of the $205 million Equity Partners in March, and the fund's portfolio was quickly converted to resemble his other charge. Schuessler's off to an auspicious, albeit brief, start here. For the 12 months through June 4, the fund's 3.7% gain earned it the number one spot in Morningstar's large-value category, mostly due to a sizable stake in energy names and a well-timed move out of financial stocks. Although these results are impressive, we'd like to see how well Schuessler handles the fund when the energy tide eventually turns. A target date hasn't been set for the merger, which still requires board and shareholder approval.
MFS Shuffles Managers
MFS announced management changes on three of its offerings this week, each effective on July 1, 2008. In two cases, MFS has promoted research analysts to funds' management teams. At MFS International New Discovery (MIDAX), Robert Lau will join long-time manager David Antonelli, as well as Peter Fruzzetti and Jose Luis Garcia. And at MFS Emerging Markets Debt (MEDAX), Ward Brown is joining manager Matthew Ryan.
Meanwhile, at MFS Global Growth (MWOFX), manager and emerging-markets specialist Nick Smithie is stepping down to focus on his other charge, MFS Emerging Markets Equity (MEMAX). Jeff Constantino, comanager of MFS Massachusetts Investors Growth Stock (MIGFX), will replace Smithie at Global Growth. Constantino specializes in picking large-cap growth stocks.
Etc.
The duet running BlackRock Intermediate Municipal (MEMTX) has become a trio. Fred Stuebe joined Theodore Jaeckel and Walter O'Connor here at the end of May. He will be the lead portfolio manager on the fund, responsible for the day-to-day management, while Jaeckel and O'Connor will focus on setting the overall investment strategy.
Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.
We’d like to share more about how we work and what drives our day-to-day business.
We sell different types of products and services to both investment professionals
and individual investors. These products and services are usually sold through
license agreements or subscriptions. Our investment management business generates
asset-based fees, which are calculated as a percentage of assets under management.
We also sell both admissions and sponsorship packages for our investment conferences
and advertising on our websites and newsletters.
How we use your information depends on the product and service that you use and your relationship with us. We may use it to:
To learn more about how we handle and protect your data, visit our privacy center.
Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.
To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.
Read our editorial policy to learn more about our process.