(PUB) Investing 2015

14

Fund News

Fund Manager Changes

American Century Small Cap Value ASVIX Impact: Negative Date: 11-01-14 Lead manager Ben Giele has left the fund in the hands of comanagers Jeff John and Miles Lewis. | Our Take: Giele had a strong track record, and John and Lewis have brief track records. In fact, Lewis has none while John has been a comanager only since 2012. We lowered our Morningstar Analyst Rating to Neutral as a result. Impact: Negative Date: 10-09-14 Comanager Abhay Deshpande has departed. Matthew McLennan and Kimball Brooker Jr. remain as managers. | Our Take: The funds remain in good hands, but they look a little shorthanded with more than $60 billion to manage. First Eagle let these funds get quite large before closing Overseas, and that’s quite a lot for the two managers to handle. We lowered the funds’ ratings to Bronze from Silver. Date: 12-01-14 Jim Goff stepped down as head of research and nominal manager of this fund. Carmel Wellso succeeds him. | Our Take: This is a research fund that delegates stock selection to the analysts. In this case, the named manager doesn’t have the same impact as at a typical actively managed fund. First Eagle Global SGENX, First Eagle Overseas SGOVX Janus Global Research JAWWX Impact: Neutral

Big Outflows for PIMCO Total Return PIMCO reported that PIMCO Total Return PTTRX suffered $19 . 4 billion in outflows in December. That’s a significant jump from November though less than in October. It’s a sign that PIMCO isn’t out of the woods yet. This new wave of redemptions is likely a reflection of the deliberate speed at which most 401 (k)s move when making changes. The people overseeing the plans may have felt that, while a change wasn’t urgent, they should move on from a fund with so much turmoil. The fund’s performance continues to indicate that flows have not been a hindrance, but we’ll be watching closely to see if they remain at an uncom- fortably high level. In other respects, news has been good at PIMCO . The firm has seen some important managers and analysts return to the fold since Bill Gross departed. Perkins Small Cap Value Reopens Perkins Small Cap Value JSCVX has reopened to new investors as of Jan. 2 , 2015 . The fund, which has a Morningstar Analyst Rating of Silver, suffered $800 million in redemptions through November 2014 and $778 million in redemptions in 2013 . The fund’s assets under management are down to $1 . 8 billion. Russian Sell-Off Hits Emerging-Markets Bond Funds The dramatic drop in the value of Russian debt and the ruble in December took its toll on broad emerging-markets bond indexes and a number of funds dedicated to the space.

PIMCO Foreign Bond (USD-Hedged) PFODX and

Impact: Negative Date: 09-26-14

PIMCO Foreign Bond (Unhedged) PFBDX Scott Mather is now lead manager at PIMCO Total Return, and these funds have been handed over to Andrew Balls, Sachin Gupta, and Lorenzo Pagani. | Our Take: It smarts to lose Mathers, though Balls is a seasoned veteran. We lowered the funds to Bronze from Silver.

PIMCO Low Duration PLDDX Impact: Negative Date: 09-26-14 Bill Gross has been replaced by Scott Mather and Jerome Schneider. | Our Take: We downgraded the fund to Bronze from Gold. Outflows and redemptions make us a little wary, but the managers are seasoned veterans.

PIMCO Total Return PTTRX, Harbor Bond HABDX and

Impact: Negative Date: 09-26-14

AMG Managers Total Return Bond MBDFX Bill Gross bolted for Janus and was replaced by Scott Mather, Mark Kiesel, and Mihir Worah. Dan Ivascyn takes over as chief investment officer. | Our Take: Despite positives, there are some big unknowns about how the new arrangement will work, so we have lowered our rating to Bronze. Date: 11-10-14 Whitney George has left Royce after being mired in a severe slump. At Royce Low Priced Stock, Jim Stoeffel is now the lead manager. He had been an assistant manager since 2013 and worked for Royce since 2009. At Royce Premier, Chuck Royce shifts from comanager to sole lead manager. | Our Take: Stoeffel produced decent results during a previous stint at CRM Small Cap Value CRISX, so there are some positives here, but he doesn’t have George’s track record. The firm says that Royce Low Priced Stock will return to its roots with lower-priced stocks and will shed the materials stocks that have killed performance. We lowered that fund to Neutral. Premier’s change is less dramatic. George’s half of the portfolio will go to Royce, who was already running the other half. We rate Royce Premier Silver. Impact: Negative Date: 04-01-15 Bob Smith is set to step down this year; Richard Clattenburg will take his place. Clattenburg has been with T. Rowe Price since 2005, serving as an analyst and associate portfolio manager. | Our Take: Clattenburg lacks a record, so it’s a big drop from the seasoned Smith. We’ve lowered our rating to Neutral. Royce Low Priced Stock RYLPX and Royce Premier RYPRX Impact: Neutral T. Rowe Price International Stock PRITX