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Lord Abbett Affiliated Manager Departs

A Fidelity fund manager steps down after inconsistent performance, Aberdeen closes on its acquisition of Artio, and a Goldman Sachs Asset Management fund manager retires.

Lord Abbett announced on June 11 that Dan Frascarelli is being relieved of his duties as manager of the $6.8 billion  Lord Abbett Affiliated (LAFFX), effective immediately, though he will continue to manage separate accounts for the firm. Frascarelli and Randy Reynolds are also being taken off the smaller  Lord Abbett Classic Stock , which will be merged into Lord Abbett Calibrated Dividend Growth (LAMAX) pending shareholder approval. Affiliated is one of Lord Abbett's oldest and largest funds, but it has suffered from erratic performance over the past decade and has trailed three fourths of the large-value category since Frascarelli took over in 2009.

The new managers of both funds are Walter Prahl and Rick Ruvkun, who manage Calibrated Dividend Growth as well as Lord Abbett Calibrated Large Cap Value and Lord Abbett Calibrated Mid Cap Value . They will adopt the same hybrid strategy for Affiliated and Classic Stock that they've used for Calibrated Dividend Growth: fundamentally driven bottom-up stock-picking focused on dividend-paying stocks, but with a quantitative overlay designed to boost returns and keep performance consistent. The Calibrated funds are all less than two years old, so they haven't yet established much of a track record, but Lord Abbett is clearly betting the strategy will be successful.

Separately, Lord Abbett announced that Gerard Heffernan has been let go as manager of  Lord Abbett Small Cap Value (LRSCX), a little more than four years after he took over the fund from longtime manager Bob Fetch. The fund has a very strong track record under Fetch, and its 10-year returns still rank in the top decile of the small-blend category. However, returns have been mediocre since Heffernan took over in February 2009. Fetch is taking over the fund on an interim basis, using the same strategy he employed in the fund's glory days, and he plans to retire at some point after Lord Abbett finds a permanent manager. The fund has had a Morningstar Analyst Rating of Neutral, and that's not likely to change given the uncertainty about its future.

Fidelity Replaces PM on Fidelity Select Brokerage
Fidelity has replaced the manager of its $717 million brokerage and investment mutual fund and its $680 million financial services fund amid inconsistent returns.

Benjamin Hesse, who had been at the helm of Fidelity Select Brokerage & Investment Management (FSLBX) since 2007 and has led Fidelity Select Financial Services (FIDSX) since 2008, departed from the fund on June 7. His replacement, who signed on as the funds' manager on May 31, is longtime Fidelity portfolio manager Christopher T. Lee, who has been with the firm since 2004.

During Hesse's tenure, Fidelity Select Brokerage & Investment Management was down 0.6%, placing the fund in the category's top half. Fidelity Select Financial Services was up 3% annualized during his tenure but landed in the bottom one third. Both funds beat the MSCI US IMI/Financials 25-50 Index.

Fidelity management has prioritized consistent fund performance, and Hesse has not achieved that. For example, one-year rolling returns for Fidelity Select Financials landed in the category's bottom quartile nearly 36% of the time.

Artio to Aberdeen Transition Officially Closes
In late May 2013, Aberdeen Asset Management, a global firm based in the United Kingdom, formally completed its takeover of Artio Global Investors, parent of the Artio funds. As a result, the five remaining Artio funds are now advised by Aberdeen have taken Aberdeen names, and the three international-equity funds have new managers.

Artio International Equity and Artio International Equity II, formerly managed by Rudolph-Riad Younes and Richard Pell, are now called  Aberdeen Select International Equity (BJBIX) and  Aberdeen Select International Equity II (JETAX). (The tickers have not changed.) They are managed by Stephen Docherty, Bruce Stout, Andrew McMenigall, Jamie Cumming, and Samantha Fitzpatrick. Docherty is head of global equities for Aberdeen, while the others are senior investment managers. The same group runs Aberdeen Global Select Opportunities , formerly Artio Global Equity.

For the two former Artio fixed-income funds that are shifting to Aberdeen, the same Artio managers and their teams remain in place and are now working for Aberdeen. Artio Global High Income (Gregory Hopper) is now  Aberdeen Global High Income (BJBHX). Artio Total Return Bond (Donald Quigley) has become  Aberdeen Total Return Bond .

Manager Retirement at Goldman Sachs
Donald Mulvihill, a portfolio manager at  Goldman Sachs (GS), has retired from the firm. Mulvihill, 56, stepped down as manager of several Goldman Sachs funds, including Goldman Sachs Structured International Tax-Managed Equity (GATMX), Goldman Sachs Structured Tax-Managed Equity (GCTAX), and Goldman Sachs Retirement Portfolio Completion . Gary Chropuvka replaced Mulvihill as a manager on these funds.

Manager Change at Invesco
Mark Laskin is no longer a portfolio manager on  Invesco Equity and Income (ACEIX) and  Invesco Growth and Income (ACGIX). Laskin joined the funds' management teams in 2007. Thomas Bastian, James Roeder, Sergio Marcheli, and Mary Jayne Maly will continue to manage Invesco Growth and Income, and Bastian, Roeder, Marcheli, Maly, and Charles Burge will continue to manage Invesco Equity and Income.

Manager Change at ING Bond Funds
Robert Robis is no longer a manager on ING Global Bond (INGBX). Michael Mata, Christine Hurtsellers, and new manager Brian Timberlake will manage the strategy. Mata also stepped down as manager of ING Intermediate Bond Fund (IIBAX) and ING Short Term Bond Fund (IASBX).

New Manager at Prudential Real Estate Funds
Michael Gallagher joined the management teams of Prudential Global Real Estate (PURAX) and Prudential U.S. Real Estate (PJEAX). Gallagher will manage the funds with Marc Halle, Rick Romano, and Gek Lang Lee.

Fund Mergers at Pioneer
On June 7, Pioneer Disciplined Growth SERSX merged into Pioneer Independence , and Pioneer Research PATMX merged into Pioneer Core Equity . Fund Times previously wrote on Jan. 24 about Pioneer's plans for these fund mergers.

Manager Departure at DWS
Ohn Choe will step down as manager of several DWS fixed-income funds, including DWS Core Plus Income (SZIAX), on June 20.

Senior fund analysts Sarah Bush, David Kathman, Katie Reichart, and Gregg Wolper and fund analysts Robert Goldsborough and Kailin Liu contributed to this report.

Morningstar Fund Analysts does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.