Pioneer Drops Cullen as Subadvisor

Pioneer Investments is parting ways with longtime Pioneer Cullen Value subadvisor Cullen Capital Management. The Cullen team, including firm founder James Cullen, has run the $4.4 billion offering since its July 2000 inception. The team will be replaced in August by Edward "Ned" Shadek and John Peckham, who currently comanage Pioneer Value . The fund will also be renamed Pioneer Fundamental Value.

Under Cullen, the fund tallied a respectable long-term record. It generated top-quartile performance versus large-value peers in 73% of the rolling 36-month periods through April 2012, while suffering less than the average peer in falling markets. But in recent years, poor stock-picking in the technology and health-care sectors hampered the fund's performance. Stakes in  Hewlett-Packard (HPQ) and  Computer Sciences Corporation (CSC)--an IT service provider that declined by more than 50% in 2011--had the biggest negative impact on results. During the trailing three-year period through May 22, 2012, the fund gained an annualized 9.9%. While decent on an absolute basis, that is only good enough for a bottom-decile showing.

As for the incoming managers, Shadek is a recent addition to Pioneer after spending 20 years at Putnam Investments. Shadek served as a portfolio manager throughout the 2000s at Putnam Multi-Cap Value (PMVAX) and Putnam Small Cap Value (PSLAX). While neither fund was a frequent top-quartile performer, each beat its respective benchmark in at least two thirds of the rolling 36-month periods encompassing his tenure. Peckham has been with Pioneer since 2002 and currently serves as the firm's co-head of equity research. 

Morningstar is currently re-evaluating this fund's rating.

Oppenheimer Merges Away Lackluster Funds
Pending shareholder approval, the crisis-hobbled Oppenheimer Champion Income and Oppenheimer Fixed Income Active Allocation funds will merge into Neutral-rated  Oppenheimer Global Strategic Income (OPSIX) later this year.

Both Champion Income and Fixed Income Active Allocation suffered extreme losses in 2008, after the former management team made overly aggressive bets on mortgage-related securities. Champion Income fell 78.5% that year, worse than all surviving high-yield bond funds, while Fixed Income Active Allocation dropped 27.5%, which was worse than all intermediate-term bond funds but one;  Oppenheimer Core Bond (OPIGX) lost 35.8%.

The horrid performance prompted Oppenheimer to sack the management team. In early 2009, Joseph Welsh, who has long managed Bronze-rated  Oppenheimer Senior Floating Rate (OOSAX), took over Champion Income, while the firm's chief investment officer Art Steinmetz became the sole manager of Fixed Income Active Allocation. The management changes suggested Oppenheimer was committed to keeping the funds in their lineup. The firm declined to comment on why it has now decided to merge the funds away.

Shareholders of Champion Income were quick to leave the fund after 2008's losses. At its peak in December 2006, the fund had roughly $2.8 billion under management, but that has fallen to $500 million as of April 2012. Fixed Income Active Allocation had $83 million in assets as of April 2012. Performance for Champion Income has been poor under Welsh's oversight. During the trailing three-year period through May 22, 2012, the fund's 12.8% annualized gain trailed 89% of its high-yield bond peers'.

Vanguard Shuts High-Yield Fund
Silver-rated  Vanguard High-Yield Corporate (VWEHX), which is subadvised by Wellington Management, has closed to new investors as of May 24, 2012. Vanguard made the decision after the fund took in $1.5 billion for the year through April 30, 2012, and $4 billion since 2009. High-yield bond fund inflows and performance have been strong lately. The category took in $17 billion the last year, second only to Morningstar's intermediate-term bond category. It's also been the best-performing fixed-income category the past three years ended May 23, 2012, rising more than 15% annualized. Vanguard isn't the first to close a high-yield fund. In April 2012, T. Rowe Price closed its  High Yield (PRHYX) bond fund after it nearly doubled in size to $9.4 billion in the wake of the 2008 downturn.

Vanguard Eliminates Redemption Fees
Vanguard has eliminated the redemption fee on 33 mutual funds. Redemption fees are designed to discourage short-term trading and typically kick in when an investor sells shares within an allotted period of time, usually 60 days. They grew in use after the market-timing scandals of the early 2000s. Vanguard says it analyzed transaction data in the funds and concluded the fees weren't necessary. A 2% redemption fee was removed from actively managed funds like  Vanguard International Explorer (VINEX) and from index offerings like  Vanguard Total World Stock . A 1% redemption fee was removed from several sector funds, including Gold-rated  Vanguard Energy (VGENX) and Silver-rated  Vanguard REIT (VGSIX). Not all Vanguard funds dropped these types of fees, though. Vanguard FTSE All-World ex-US All-Cap Index still charges purchase and redemption fees to offset the costs of investing in some illiquid foreign markets. But Vanguard recently announced it cut the fees, which are paid to the fund not Vanguard, to 0.50% from 0.75%.

Cohen & Steers Shuffles Managers
Cohen & Steers has promoted Jon Cheigh and Tom Bohjalian to head of the firm's global and U.S. investment teams, respectively. In the wake of the moves, portfolio manager Scott Crowe is leaving the firm. Cheigh will remain a comanager at  Cohen & Steers Realty Shares (CSRSX) and will also assume Crowe's manager duties on  Cohen & Steers International Realty (IRFAX). In turn, Bohjalian will become a named manager on Realty Shares. While the loss of a manager is always a red flag, the firm's team-based approach should smooth the transitions at both offerings. Both funds have yet to receive a Morningstar Analyst Rating. 

Etc.
Harbor Funds is swapping subadvisors at two of the firm's value equity funds. Aristotle Capital Management will replace Cohen and Steers Investment Management as the subadvisor to  Harbor Large Cap Value (HILVX). Also, Causeway Capital Management will replace Pzena Investment Management as the subadvisor to Harbor Global Value .

Virtus Short/Intermediate Bond (HIMZX) has replaced subadvisor Harris Investment Management with Newfleet Asset Management. The fund has also changed its name to Virtus Low Duration.

Lord Abbett will merge Lord Abbett Large Cap into  Lord Abbett Fundamental Equity (LDFVX) on June 15.

Greg Lee was named comanager of Fidelity Total Emerging Markets (FTEMX).

David Kafes has departed as a comanager of Legg Mason Investment Counsel Social Awareness (SSIAX). Ronald Bates remains as manager. He will be joined by new comanager Aimee Eudy.

Current comanager of ING Large Cap Value (IEDAX) David Powers will leave the fund on May 25. Comanagers Robert Kloss and Christopher Corapi remain with the fund. 

RS Funds filed to launch the RS Equity Income Fund.

Leuthold Hedged Equity will liquidate in June 2012. 

Mutual Fund analysts David Falkof, Flynn Murphy, and Rob Wherry contributed to this report.