Fidelity Fund Proposes Fee Hike
Plus, Wasatch to launch India fund, and more.
Fidelity proposed to raise Fidelity Fund's (FFIDX) expense ratio to 0.80% from 0.60%. In a proxy statement filed April 15, 2011, Fidelity proposed to increase the fund's management fee to 0.30% from its current level of 0.09%, as well as to adopt a performance adjustment. Under the performance adjustment, the expense ratio would increase 0.02% with every percentage point of outperformance in a three-year period, and decrease the same amount with every percentage point of underperformance.
Fidelity justified the fee increase by saying it "charges a management fee that is 0.21% below Fidelity's standard fee for similarly managed funds," and that the adoption of the increase "will fairly compensate FMR for the management services provided to the fund."
According to lead Fidelity analyst Christopher Davis, manager John Avery has beaten the S&P 500 by 0.24% annually during his tenure. The fund's proposed fee hikes, once fully implemented, would virtually wipe out that margin of victory.
Wasatch to Launch Emerging-India Fund
Wasatch will launch Wasatch Emerging India on April 26, 2011. A team of portfolio managers, led by Ajay Krishnan and Roger Edgley, will run the fund. Krishnan and Edgley joined Wasatch in 1995 and 2003, respectively.
This is Wasatch's fifth new international fund since 2002, illustrating the shop's increasing international focus. Krishnan is no stranger to investing in India. He currently manages Wasatch Ultra Growth (WAMCX), which has 12% in Indian stocks.
Federated Gains $515 Million
Federated will acquire $515 million of equity, fixed-income, and money market assets from EquiTrust Mutual Funds. The portfolios of EquiTrust Series Fund and EquiTrust Variable Insurance Series will merge into comparable Federated mutual funds. Federated held $358.2 billion in assets as of Dec. 31, 2010.
DWS Changes Managers
DWS changed the management teams of DWS Strategic Value (KDHAX) and DWS International (SUIAX). Both funds are now managed by Jason Inzer and Thomas Voecking, and will be run under a "market research" system that synthesizes fundamentally based stock recommendations from 5,000 internal and external analysts globally. Voecking and Inzer joined DWS in 1991 and 1997, respectively.
Volker Dosch, Oliver Pfeil, and Thomas Schuessler previously managed DWS Strategic Value since June 2009. Nikolaus Poehlmann, Andreas Wendelken, and Mark Schumann previously managed DWS International since October 2009. Neither fund had outperformed in the previous management team's tenure.
Commodity Fund to Close
HighBridge Dynamic Commodities Strategy (HDSAX) will close to most new investors on May 2, 2011. The fund started in January 2010 and its one-year return as of March 31, 2011, outperformed the U.S. commodities broad-basket category average. The fund currently holds $1.8 billion in assets, having gathered $956 million in the first three months of 2011.
Davis/Selected Wins Iron Mountain Battle
Iron Mountain (IRM) agreed to appoint an independent director backed by Davis Selected Advisors and hedge fund Elliott Management. Davis and Elliott previously took measures to pressure Iron Mountain to adopt several measures to enhance shareholder value, including electing four members to Iron Mountain's board and committing to pay out $2.2 billion to shareholders through 2013. Davis NY Venture (NYVTX) owns about 10% of Iron Mountain's total shares, while Selected American Shares (SLASX) owns about 2.5%. Both funds have owned the stock since 2005. Clipper (CFIMX), which is also managed by Davis, also added Iron Mountain to its portfolio in the first quarter of 2011.
Wintergreen Continues Consolidated-Tomoka Fight
Wintergreen (WGRNX) will vote against the re-election of outgoing CEO Bill McMunn to Consolidated-Tomoka Land Company (CTO)'s board of directors. Manager David Winters expressed his stance against McMunn's re-election to CTO's board earlier this year.
On April 19, 2011, PIMCO filed to launch PIMCO Senior Floating Rate. The fund will invest in floating-rate senior-secured loans, senior corporate debt, and other senior fixed-income securities. The fund can invest up to 5% of assets in below-investment-grade securities, up to 10% of assets in instruments tied to emerging markets, and can also use derivatives. Elizabeth MacLean will manage the fund.
Jon Jonsson is no longer on the management team of JPMorgan Multi-Sector Income (JSIAX). The fund is now managed by current managers Robert Michele and Iain Stealey, and new managers Nicholas Gartside and Matthew Pallai.
Christopher Diaz is no longer on the management team of ING Global Bond (INGBX). The fund is now managed by Michael Mata and new comanager Christine Hurtsellers.
BlackRock filed to launch BlackRock ACWI ex-US Index on April 15, 2011. The fund will approximately track the performance of the MSCI All-Country World ex-US Index by investing in stocks or other securities similar to components of the index.
GMO filed to launch GMO Asset Allocation International Small Companies on June 30, 2011. The fund will normally invest at least 80% of assets in stocks of non-U.S. small companies. The fund can also use derivatives.
On April 15, Janus filed to launch Janus Asia Equity. The fund will invest at least 80% of assets in stocks of Asian companies (excluding Japanese companies). The fund will not be constrained by market cap, and can also invest in emerging-markets companies. The fund will be managed by Hiroshi Yoh.
John Hancock launched an A share class of John Hancock Emerging Markets (JEVAX). The strategy has been available since 2007, though not directly to retail investors.
Scout filed to launch Scout Global Equity on April 15, 2011. The fund will invest at least 80% of assets in stocks of companies anywhere in the world, including emerging markets. The fund will normally invest in companies and have exposure to at least three different countries, including the U.S. William Greiner, Gary Anderson, and James Reed II will manage the fund.
Bradford & Marzec no longer subadvises Touchstone Core Plus Fixed Income (TCPAX). The fund is now subadvised by EARNEST Partners. Douglas Folk and Chris Fitze manage the fund on a day-to-day basis.
Columbia's Retirement Plus target-date series (Columbia Retirement Plus 2035 (CRPZX)) made its glide path more conservative. The series will begin to reduce equity exposure 35 years prior to the target, compared with the previous glide path, in which equity exposure began to decrease 15 years before the target date. The series will also phase out of equities completely 20 years after the target. The previous glide path held 25% in equities 25 years after the target date. Columbia Retirement Plus target-date series is the only series that completely phases out equities.
Columbia Asset Allocation (LAAAX), Columbia Asset Allocation II (PHAAX), and Columbia Liberty (COLFX) added Columbia Greater China (NGCAX), Columbia Absolute Return Enhanced Multi-Strategy (CEMAX), and Columbia Absolute Return Multi-Strategy (CMSAX) to their lineups of underlying funds.
On April 15, Neuberger Berman filed to launch Neuberger Berman Global Equity and Neuberger Berman Global Thematic Opportunities. Neuberger Berman Global Equity will invest at least 80% of assets in mainly large-cap companies all around the world. Neuberger Berman Global Thematic Opportunities will invest at least 40% of assets in companies around the world that the managers believe will benefit from global trends.
On April 19, American Beacon filed to launch American Beacon Flexible Bond. The fund will invest at least 80% of assets in both domestic and foreign bonds of any credit quality, although the fund will normally hold less than 25% high-yield bonds. The fund can also gain fixed-income exposure through derivatives.
Franklin India Growth (FINGX) reduced the fund's management fee by 0.15%.
Managers Investment Group launched Trilogy Emerging Markets Equity, Trilogy Global Equity, and Trilogy International Small Cap on March 31, 2011. The funds are subadvised by Trilogy Global Advisors, who has previously run these strategies in institutional accounts.
Senior mutual fund analysts Christopher Davis and Katie Rushkewicz, and mutual fund analysts Ryan Leggio, Josh Koeck, and Kathryn Young contributed to this report.
Kailin Liu does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.