Seven Big Fund Surprises From 2010's First Half
Booming Treasury funds, Vanguard gets its S&P 500 ETF, stock-fund flows make a U-turn, and more.
I hope you like surprises, because there have been a more than a few for fund investors so far this year. Here, in no particular order, are some of the biggest as of mid-2010.
A Big Dog's Moving In
Maybe an old dog can learn new tricks. The oldest index mutual fund in the world, Vanguard 500 (VFINX), will finally get a new ETF share class before the end of the summer if all goes according to Vanguard's plan. The fund family sought permission from the SEC in June to offer the new share class and launch 19 other new index funds with ETF shares. It had been nearly a decade since a licensing dispute with Standard & Poor's nixed Vanguard's plans to launch an ETF version of its S&P 500 Index tracker. So long that many gave up hoping the venerable mutual fund would ever get ETF shares. Existing ETFs tracking the benchmark, SDPR S&P 500 (SPY) and iShares S&P 500 Index (IVV), have a huge head start, but Vanguard is trying to make up for lost time by offering its S&P 500 ETF for just 0.06%, one third cheaper than its rivals. If you have a Vanguard brokerage account you can buy the cheapest S&P 500 ETF available commission-free.
Billion Dollar Man
There was applause when Jeffery Gundlach told an audience of advisors at the 2010 Morningstar Investment Conference last week that his new flagship fund, DoubleLine Total Return (DBLTX), had just crossed the $1 billion mark in less than three months. That's quite a pile to amass in a short time. Yet, given the 2006 Morningstar Fixed Income Manager of the Year's outsized reputation and tempestuous split from his former firm, TCW, the milestone might actually be a disappointment. Fortune reported in March that the firm expected $10 billion in new accounts this spring, so not much of the nearly $7 billion that investors have pulled out of Gundlach's old fund, TCW Total Return (TGLMX), since he left last December, seems to have made it to DoubleLine yet. DoubleLine Total Return's take also is about 5% of what Bill Gross's Pimco Total Return (PTTRX) took in the first five months of the year.
Dan Culloton has a position in the following securities mentioned above: PTTRX. Find out about Morningstar’s editorial policies.