Fund Manager Changes Deserving of a Deeper Look
Have these three funds taken one step forward and two steps back?
We follow significant manager changes at Morningstar, and it's instructive to check in on some of those funds down the line and see what kind of impact the new skippers have on their charges. Here are three funds for which those changes raise some concerns.
Fidelity Growth & Income (FGRIX)
This fund's shareholders have been through the wringer. Longtime skipper Steve Kaye, who employed a conservative style that shone in the 2000-02 bear market, was pushed out in late 2005 after sharply lagging his large-blend peers in the rally that followed. The much-more-adventurous Tim Cohen took over and bought economically sensitive fare only to see it tank. He was given the heave-ho in early 2009, just before the recent rally started, in favor of James Catudal.
Catudal's strategy is nothing like Cohen's; he keeps the fund's sector weightings close to those of the S&P 500 Index and attempts to outperform through modest bets on individual firms. His former charge, Fidelity Stock Selector (FDSSX), essentially tracked the index during his eight-year tenure, and it wouldn't be surprising to see the same thing happen here. (The fund has now lagged the category norm each calendar year since 2002.) It's as if this fund's approach went from too cool, to too hot, to too dull.
Greg Carlson does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.