(PUB) Investing 2015

14

Fund News

Fund Manager Changes

AMG GW&K Core Bond MBDFX Date: 02-28-15 AMG fired PIMCO and replaced it with GW&K. It also renamed the fund from its former name AMG Managers Total Return Bond Fund. The fund had been a near clone of PIMCO Total Return PTTRX but will now be run by institutional money manager GW&K. Mary Kane will serve as manager. Kane has a brief two-year tenure at AMG GW&K Enhanced Core Bond Investor MFDAX, which has performed well during her tenure. | Our Take: The fallout from Bill Gross’ departure keeps coming. GW&K has a good reputation, but we don’t cover any of its funds yet. Date: 01-05-15 Kent Gasaway left the fund to focus on Buffalo Small Cap BUFSX, and Dave Carlsen replaced him as comanager. Bob Male remains as comanager. | Our Take: This is the second round of manager changes at Buffalo in recent years, and it comes amid slumping performance. In addition, Carlsen doesn’t have a long and meaningful track record. Thus, we have downgraded the fund to x from Bronze. Columbia Acorn USA AUSAX Lead manager Rob Mohn plans to retire in the fourth quarter of 2015. In addition to comanager David Frank, Zach Egan and Fritz Kaegi were named comanagers of the fund to prepare for Mohn’s departure. No managers were added to Columbia Acorn USA, where William Doyle serves as Mohn’s comanager. In addition, Acorn is moving to a more traditional PM/analyst division of labor in which analysts will no longer add stocks and choose their portfolio weighting. | Our Take: Poor performance has spurred wrenching changes at the funds. We have put both funds under review. We lowered Columbia Acorn’s Morningstar Analyst Rating to Neutral in 2014 because of concerns about redemptions and poor performance. Columbia Acorn USA had been rated Bronze. Impact: Negative Date: 04-05-15 Comanager Jeff Kautz resigned. Kevin Preloger, who was named comanager in April 2013, remains and will be joined by Justin Tugman of Perkins Small Cap Value JSCVX. | Our Take: The fund has been trying to get back on track after several years of underwhelming performance. The fact that its five- year results aren’t up to par isn’t surprising or disappointing given the fund’s relatively conservative process, but weak stock-picking is more cause for concern. The loss of a long-tenured manager is disappointing but not insurmountable. Risk-adjusted results since inception remain strong. However, the departure, coupled with the fund’s stock-picking woes, is enough to move this fund’s Morningstar Analyst Rating to ´ from Silver. 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 x . 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 • . Impact: Negative Date: 06-01-15 Veteran manager Larry Keele is stepping down and being replaced by Stuart Spangler. | Our Take: Oaktree is an excellent firm so we remain confident in the fund, but it’s still a blow to lose Keele, who has built a great record here. We lowered our rating to ´ . Impact: Neutral Buffalo Mid Cap BUFMX Impact: Negative Columbia Acorn ACRNX Impact: Negative Date: 05-01-15 Perkins Mid Cap Value JMCVX Royce Low Priced Stock RYLPX and Royce Premier RYPRX Impact: Neutral Vanguard Convertible Securities VCVSX

Apple Owned by Four Fifths of Large- Growth Funds They love iPhones in China. This is why Apple AAPL just reported a mind-bogglingly large profit of $13 . 6 billion in the past quarter. The stock has been vital to large-cap-growth fund performance. So, I wasn’t surprised to see that 81% of actively managed large-growth funds own shares of Apple. True, there are some notable holdouts, such as Sequoia Fund SEQUX , Primecap Odyssey Growth POGRX , Janus Twenty JNTFX , and Fidelity New Millennium FMILX . Should you dump them for missing one of the great growth stocks? I wouldn’t. I like independent managers who don’t force a stock into the portfolio if it doesn’t fit their strategy. Matthews Asia Dividend Reopens • -rated Matthews Asia Dividend MAPIX reopened to investors at the end of April 2015 . The fund had $722 million in net outflows in 2014 , though it had $68 million in inflows in the first quarter of 2015 . T. Rowe Price Health Sciences to Close T. Rowe Price said it will close its wildly popular T. Rowe Price Health Sciences PRHSX to new investors as of June 1 , 2015 . The fund has $13 . 6 billion in assets, so the move is a welcome one. The fund’s success has come from its emphasis on small- and mid-cap health-care stocks—in particular biotech stocks. Asset bloat threatens to force the fund into larger, slower-growing pharma names. Janus Venture and Triton to Close Janus announced it will close Janus Venture JAVTX and Janus Triton JATTX to new investors as of May 15 . The funds saw flows dip with the departure of managers Chad Meade and Brian Schaub, but performance has been strong enough to renew