Fund Times: Legg Mason's Miller Tops Q2 Performance Chart
Plus, Vanguard Wellington celebrates its 80th anniversary.
We usually don't like to focus on short-term results. But it's hard not to take notice when the fund at the top of a performance list is run by Bill Miller, the Legg Mason Value (LMVTX) manager who became famous in the fund industry for beating the S&P 500 for 15 consecutive years.
Miller's Legg Mason Opportunity (LGOAX), a go-anywhere version of large-cap-focused Value Trust, posted a 48% return in the second quarter compared with just a 15% return for the S&P 500 Index. This result landed the fund on top of all other domestic equity funds with more than $100 million in assets for the second quarter.
This strong performance is not only due to the impressive returns of some longtime holdings such as Level 3 (LVLT) (up 66% for the quarter) and Sprint Nextel (S) (up 35%), but also the performance of new holdings such as Citigroup (C) (both common and preferred shares), Bank of America (BAC) (preferred), and Fifth Third (FITB) (preferred).
Miller's fund still has a lot of work left to do to recover from 2008's eye-popping 65% loss: The fund remains in the bottom decile in the mid-cap growth category over the trailing three- and five year periods as of July 1. But these results should remind investors to never count Miller out.
PIMCO Launches New Funds
PIMCO is launching PIMCO MuniGO Fund, which will focus on the highest-quality municipal bonds. MuniGO will invest in intermediate-maturity general-obligation bonds from top-rated municipal issuers, as well as prerefunded municipal bonds backed by U.S. Treasury and agency securities. The fund is managed by John Cummings, who heads PIMCO's municipal-bond trading desk.
PIMCO also announced that it will launch Emerging Markets and Infrastructure Bond Fund, which will seek to capitalize on the expected sharp increases in spending by developing nations on energy, transportation, water and waste treatment, telecommunications, public housing, and development banks. According to PIMCO, emerging-market governments around the world are targeting infrastructure investments and have more than $1 trillion of projects committed to or under way.
Artisan also announced that Shayne John, comanager of Artisan Mid Cap (ARTMX) since August 2007, and comanager of Artisan Opportunistic Growth (ARTRX) since its September 2008 inception, has left the firm. There are no plans to hire a replacement. Remaining managers Andy Stephens and Jim Hamel will continue to be supported by six analysts.
Vanguard Wellington Observes Its 80th Anniversary
There are thousands of mutual funds. In addition, hundreds of new funds are launched every year and another group of hundreds is folded. There have been relatively few constants for investors over the decades but one of these has been Analyst Pick Vanguard Wellington (VWELX). At the end of the second quarter, the fund celebrated its 80th anniversary.
For more than half a century, this 60/40 balanced fund has been a model for a balanced approach to investing, offering investors broad diversification and low costs. First known as Industrial and Power Securities Co., Wellington Fund was incorporated as a balanced fund of stocks, bonds, and cash on Dec. 28, 1928. The fund was renamed Wellington in 1935, the year in which it reached its $1 million milestone (it currently has around $40 billion in total net assets).
Wellington Management Company has been Vanguard Wellington Fund's advisor for 80 years. Edward P. Bousa is only the third equity manager to take the helm of the fund over the past four decades.
Investors have been well served during this fund's history and will continue to benefit from its attractive fees (it has an expense ratio of just 0.30%) and seasoned management.
Effective July 1, Robert Galusza has been named lead portfolio manager of Fidelity Intermediate Bond (FTHRX), which he will manage with co-portfolio manager Ford O'Neil. Galusza will continue to manage Fidelity Short-Term Bond (FSHBX), among other funds, for which he assumed responsibility in July 2007. Galusza joined Fidelity in 1987 as a fixed-income portfolio analyst. Previously, he was an international underwriter for Chubb and Son Inc., in Washington, D.C., from 1985 to 1987, performing risk analysis on international corporations.
Ed Killen, one of five managers on all three Berwyn funds ( Berwyn Fund (BERWX), Berwyn Cornerstone (BERCX), and Berwyn Income (BERIX)) and a 27-year veteran of the firm who previously took the lead role on Berwyn Income, has left the firm. He will continue to work at the firm's affiliated broker.
In response to growing demand from New York clients, American Century Investments today launched its American Century New York Tax-Free Fund this week. Its managers will invest at least 80 percent of the fund's assets in debt securities issued by cities and other municipalities that have interest payments exempt from federal and New York income taxes. The fund will be comanaged by Joe Gotelli, Steven Permut, and Alan Kruss. The team helps manage a total of seven distinct municipal-bond strategies totaling $3 billion as of May 31, 2009.
Mutual Fund Analyst Greg Carlson contributed to this report.
Ryan Leggio does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.