Fund Times: Fidelity Share Class to Have Admiral Look
Plus news on Robeco, ETFs, and more.
Fidelity is launching new "Advantage Shares" for some of its index funds, and renaming the existing shares "Investor Shares." The affected funds so far include: Spartan 500 Index, Spartan Total Market Index, Spartan Extended Market Index, and Spartan International Index.
The Advantage shares are a type of preferred share class, similar to Vanguard's Admiral share class, and will offer discounted fees for accounts that meet the $100,000 minimum. Thus, while the Investor shares will continue charging 10 basis points, the new Advantage Shares will charge just seven basis points. Further, it's worth pointing out that while Vanguard's Admiral shares are available across most of its fund lineup, Fidelity's move is extremely limited at this point.
Another Fidelity Manager Departs
David Baverez of Fidelity Europe (FIEUX) has left the firm to pursue other interests. Baverez successfully managed the fund since January 2003 and completely turned around performance--leading it to top-quartile annual returns for the first time in over 12 years. Baverez's departure is frustrating, given that he was only settling into his role.
Replacing Baverez will be Frederic Gautier. Although Gautier does not have a U.S.-based track record, he has run several European funds since 1999. In that regard, he has a middling track record managing the U.K.-based Fidelity UK Growth fund. However, the more diversified European large-cap fund he manages, Fidelity Advisor World Europe, has performed well.
Retiree Spurs Management Shuffle at Robeco
Robeco Boston Partners Large Cap Value Fund (BPLAX) is losing comanager Wayne Sharp, who will retire at the end of the year. Fellow comanager Mark Donovan--who ran the fund together with Sharp since the fund's inception--will be joined at the firm by David Pyle, who was previously an equity analyst for the team. Since the fund's strategy involves a fairly low-turnover style, we don't think this will have a huge impact on performance.
In another move, Duilio Ramallo is replacing Steven Pollack as comanager of the Robeco Boston Partners All Cap Value Fund (BPAIX). Ramallo, who has experience as an equity manager for the Robeco Boston Premium Equity product, joins current comanager Harry Rosenbluth at a fund that has held its own against its typical mid-cap value category rivals.
Although former Fidelity manager William Eigen left the firm (as we reported in last week's Fund Times), the Boston-based fund complex is not letting his departure get in the way of launching a new fund in a currently hot category: Fidelity Strategic Real Return Fund. It will have a go-anywhere investment strategy, including buying inflation-protected securities, floating-rate loans, commodity-linked notes, REITs and other real estate investments, and various types of equities. Christopher Sharpe and Derek Young, who are taking charge of Eigen's other funds, will comanage the new fund, which will have a 0.95% expense ratio. Given Eigen's departure, however, we wish that Fidelity had put this fund on the back burner.
Exchange-traded fund giant Barclays Global Investors is launching its first international style-based ETFs for the U.S. market, posing a new threat to rival Vanguard (see our recent Fund Spy for more details). The iShares MSCI EAFE Value Index Fund and the iShares MSCI EAFE Growth Index Fund will track the value and growth subsets of the MSCI EAFE Index, which mainly contains European, Australian, and Far Eastern countries. The expense ratio for each fund will be 0.40%, which is average compared with other ETFs, but on the expensive side next to open-end index funds, such as Vanguard Developed Markets Index (VDMIX).
Kevin O'Boyle, the former comanager of the successful Meridian Value (MVALX), is launching his own no-load fund using a similar strategy. The Presidio Fund will utilize an all-cap approach to buy undervalued, out-of-favor stocks. Up to 25% of the fund may also be in convertibles and fixed-income securities. The expense ratio is expected to be 1.50%, which is on the steep side. As such, we'll be looking for expenses to decline sharply if the fund gathers assets.
Finally, in entirely unrelated news, the White Sox continue to dominate, even as the cross-town Cubs continue to struggle. Go Sox!
(Disclosure: Kevin O'Boyle is the brother of Morningstar fund analyst Kerry O'Boyle. Kerry O'Boyle did not contribute to this report.)
Dieter Bardy does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.