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Fund Times

Fund Times: A Slew of Fidelity Manager Changes

Plus, Franklin manager moves and news on American Century.

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Fidelity Overseas'  (FOSFX), Fidelity Aggressive International's (FIVFX), and Fidelity Global Balanced's (FGBLX) lead manager, Richard Mace, is taking a leave of absence from the firm, effective Jan. 1, 2006. Ian Hart, who managed Fidelity Europe Capital Appreciation (FECAX) since 2000, has been named portfolio manager of Fidelity Overseas. The press release implies that Hart will be a permanent replacement for Mace at Overseas. Hart is a good manager, so this might be a positive development for the Overseas fund. In Hart's place, Darren Maupin will take over at Europe Capital Appreciation. Most recently, Maupin was an equity analyst following technology stocks, but he has no prior experience running a public mutual fund.

In Mace's absence a management team will lead Aggressive International. The team will include Michael Jenkins, William Bower, Penelope Dobkin, and William Kennedy. Bower, the most high-profile of the bunch, has been a portfolio manager for Fidelity Diversified International (FDIVX) since 2001.

Derek Young will serve as interim manager for Fidelity Global Balanced. Young will continue to comanage his four other funds during this time. Fortunately, Young will also have assistant managers on Global Balanced while Mace is on leave.

Finally, Jeffrey Feingold has been named lead portfolio manager of Fidelity Worldwide Fund (FWWFX), also succeeding comanager Mace, and will manage the U.S. portion of the fund. William Kennedy will select non-U.S. stocks. And Graeme Rockett will lead the VIP Overseas Portfolio succeeding Mace.
 
We're disappointed with the latest round of musical chairs at Fidelity. The firm has pledged to work at lengthening manager tenure at its funds, but today's news only confirms that the firm has much work to do.

(For further details on the manager news, click here.)

Franklin Equity Income Fund Effects Management Changes
 Franklin Equity Income (FISEX) has shaken up its management team.  Franklin Convertible Securities (FISCX) manager Alan Muschott has taken over as lead manager and  Franklin Income (FKINX) manager Ed Perks has joined the team. Longtime lead manager Frank Felicelli remains--but in a reduced role as he devotes more time to his role as CIO of Franklin's private client group. Former comanager Sam Kerner has moved to the firm's New Jersey-based value investing outfit that runs  Franklin Rising Dividends (FRDPX) and  Franklin Balance Sheet Investment (FRBSX). It's not yet clear if he will be working as an analyst or manager there.

The change is a positive one. Equity Income had delivered exposure to high-yielding stocks and produced decent absolute returns without a lot of volatility over the years, but it has lagged other dividend-centric funds and the large-value category overall due to poor stock selection. Both Muschott and Perks have good records at their current funds and a lot of experience researching income-oriented securities. There should be no dramatic strategy change--but there may be better execution. 

American Century Meets Mason Street
American Century Investments announced that it is adding 10 Mason Street funds to the American Century fund family. The reorganization is still subject to Mason Street shareholder approval, but if approved, four of the funds will be renamed as American Century-Mason Street, with Mason Street Advisors serving as subadvisor.

The affected funds are Mason Street Funds Small Cap Growth (MSASX), Aggressive Growth (MAGAX), Select Bond (MBDAX), and High Yield Bond  (MHYAX), which will be the new American Century-Mason Street funds. The two former Mason Street funds that will be renamed American Century funds are International Equity (MEQAX) and Municipal Bond (MMBAX), of which the former will continue to be subadvised by Templeton Investments Counsel, LLC. And finally, four Mason Street funds, Index 500 (MISAX), Large Cap Core (MSKAX), Asset Allocation (MASSX), and Growth Stock (MGSAX), will be reorganized into existing American Century funds, which will continue to be advised by American Century. One last change to the Mason Street lineup, Mason Street Index 400 Stock (MSIAX) will be merged into the  Federated Mid-Cap Index (FMDCX).

The funds are almost all mediocre to poor performers and have had difficulty attracting investors. Being folded into the American Century lineup will surely give the Mason Street funds a leg up in attracting new money.

Good One
This is how Fido's latest 497 describes Select Biotech's (FBIOX) Rajiv Kaul's biography:
 
"Rajiv Kaul is manager of Biotechnology Portfolio, which he has managed since October 2005. He also manages another Fidelity fund. Since joining Fidelity Investments in 1996, Mr. Kaul has worked as a research analyst and portfolio manager."

Well, thanks for the details.

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