Fund Times: T. Rowe Price International Chief to Retire

Significant changes at the top of T. Rowe Price's international efforts are in store for early next year. David Warren, chief executive of T. Rowe Price International, will retire in March 2009, and Chris Alderson will step into that role. Alderson, who has called the shots at  T. Rowe Price Emerging Markets Stock (PRMSX)--a Morningstar Fund Analyst Pick--since 1995, currently helms the firm's emerging-markets team. When Alderson steps into Warren's role, Gonzalo Pangaro, who has run  T. Rowe Price Latin America (PRLAX) (also an Analyst Pick) since 2000, will take over leadership of the emerging-markets crew, handing off Latin America to analyst Jose Costa. Another analyst, Joseph Rohm, will take over Alderson's responsibilities on the year-old T. Rowe Price Africa & Middle East (TRAMX).

Under Warren's leadership, T. Rowe Price made noteworthy strides in building out and shaping up its international efforts. Before 2000, the firm's international funds were run out of a joint venture established in 1979 between T. Rowe Price and London's Robert Fleming Holdings. But when  J.P. Morgan Chase (JPM) acquired Fleming at the start of this decade, T. Rowe Price bought out Fleming's interest and got to work, adding substantially to the analyst ranks and bringing the operation more in line with the model the firm had successfully implemented on the domestic side.

Small-Cap Favorite Reopens
 Century Small Cap Select (CSMVX) , a Morningstar Analyst Pick in the small-growth category, is once again open to new investors. The fund first closed in July 2005, when its assets reached $900 million, as investor interest outpaced the availability of attractive investment opportunities. The fund's assets have since shrunk to $500 million, and lead manager Lanny Thorndike argues that he's finding plenty of high-quality growth companies trading at appealing discounts in the current environment. Thorndike and comanager Kevin Callahan are conservative, valuation-sensitive investors, and their approach has stood out in bear markets. The fund gained money in the 2000-02 downturn and, so far this year, has lost less than its peers have. Now that it's open, we think it's well worth considering.

We're not the only fans of this fund's approach, either. In July, Vanguard added Thorndike to the roster at the recently reopened  Vanguard Explorer (VEXPX), another small-growth Analyst Pick. That brings the total number of subadvisors running the fund's $10 billion in assets to seven from six.

Soon the Duet Will Become a Trio
The team running large-blend offering  Oak Value  is slated to expand. Christy Phillips--who has worked at advisor Oak Value Capital Management since December 2003 as a senior analyst, research director, and investment committee member--will join firm-founder David Carr and comanager Larry Coats in calling the shots at this offering. Although her responsibilities on the fund won't officially begin until November, she has already begun to share portfolio management duties on the firm's institutional and high-net-worth accounts.

After six straight calendar years of sluggish performance from 2002 through 2007, the fund has proved more protective than most rivals during the latest downturn. Its 14% loss for the year through Sept. 18, while not exactly cause for celebration, still beats the S&P 500's 20% loss and more than 90% of its large-blend peers.

Matthews Launches Small-Cap Fund
Matthews International Capital Management, a firm specializing in Asian equity strategies, has added a new fund to their lineup. Although the firm has experience investing in the region's smaller companies at offerings like the all-cap  Matthews Asia Pacific (MPACX), the new fund, Matthews Asia Small Companies (MSMLX), is their first offering to emphasize companies with market capitalizations under $3 billion. Although they've resisted such a launch in the past, they argue that the substantial growth and increased diversity of the Asian small cap universe, as well as further development of the region's capital markets in recent years, give a dedicated small-cap offering more credence today. For instance, they point out that there are more than 8,000 small companies currently listed on the stock markets of Asia (excluding Japan) compared with more than 6,000 in the U.S, while noting that such companies raised $116 billion through initial public offerings in the past five years.

Lydia So leads the efforts on the fledgling fund, with the help of comanager Noor Kamruddin. So has researched small caps for sibling  Matthews Pacific Tiger (MAPTX), and she joined the management team at  Matthews Asian Technology (MATFX) earlier this year. Kamruddin joined Matthews in May, after four years at notable small-cap boutique Wasatch Advisors, where she ran  Wasatch Global Science & Technology (WAGTX) for a little over two years. The fund's 2% price tag, which lands well above the median for other no-load options emphasizing Asian companies, isn't much to get excited about.

Managers Fires Subadvisors, Liquidates Funds
The directors of the $1 billion in assets small-blend offering  Managers Special Equity (MGSEX) have approved the termination of subadvisory contracts with growth manager Veredus Asset Management and deep-value shop Donald Smith & Co. In their place, advisor Managers Investment Group has hired two new subadvisors, Ranger Investment Management and Federated MDTA. They join the remaining four subadvisors on the fund: Lord Abbett, Skyline, Smith Group, and Westport.

It remains to be seen whether this management shakeup will improve performance at this long-term laggard. The fund trails its benchmark, the Russell 2000 Index, over all periods up to 10 years and barely edges the index over 15 years. The only calendar year since 1997 in which it soundly beat the index was 1999, due to big gains by two very aggressive subadvisors who no longer work on the fund. The fund's hefty 1.43% expense ratio, well above average for similar no-load offerings, further damages its case.

Managers also announced plans to liquidate two of its smaller funds: large-value offering Managers Value  and its small-growth sibling Managers Small Company . The liquidation of the funds' $51 million and $27 million in assets, respectively, should be completed by Nov. 24, but investors can expect a small distribution of accrued capital gains before the end of September.

Fidelity Fund Doles Out the Cash
Alert the accountants. Earlier this week,  Fidelity Low-Priced Stock (FLPSX) paid a $4.26 per share distribution to shareholders, representing an 11.9% decline in the fund's net asset value. That doesn't affect the fund's total return, because the distribution is either reinvested in the fund or paid out in cash, depending on shareholders' preselected preference. But those who don't own the fund in a tax-advantaged account will have to pay taxes on the distribution (divided into a $0.15 dividend and $4.11 in long-term capital gains per share).