(PUB) Investing 2016

14

Fund News

Fund Manager Changes

AMG Yacktman Focused YAFFX and AMG Yacktman YACKX Date: 05/01/2016 Founder Don Yacktman stepped down officially as manager on the fund. Stephen Yacktman and Jason Subotky remain as managers. Our Take: Don Yacktman has been dialing back his work on the fund for a number of years, so this was not a surprise and our ratings already reflected the fact that Stephen Yacktman and Subotky were the driving forces at the funds. The funds retain their respective • and Œ ratings. Impact: Negative Date: 2017 MFS announced that longtime lead manager David Mannheim will retire in one to two years. Ryan McAllister will join the fund as a comanager in September 2016. Roger Morley, who has been a comanager since 2009, will remain on board. Our Take: Mannheim has done a great job and will be missed. While Morley is a seasoned MFS veteran who has a successful record running a fund on his own, McAllister doesn’t have as much experience, though he has been at the firm since 2007. Also, Morley and McAllister will continue to draw on the work of a strong group of analysts. We still have faith in the fund but have cut our rating one notch to • . Impact: Negative Date: 07/10/2016 Tadd Chessen, who joined Perkins Investment Management in April 2013 as an international analyst and was named comanager of Perkins Global Value later that year, has left the firm. His departure comes just a year after comanager Christian Kirtley left to rejoin ICAP, his employer prior to Perkins. Firm CIO and lead manager Greg Kolb remains in place. Kolb has overseen this fund since 2005 when it was run out of parent company Janus; he and the fund moved to value subsidiary Perkins in 2010. Meanwhile, George Maglares, an analyst who joined Perkins in 2013, has been promoted to comanager. Our Take: Given Kolb’s history with the fund, it retains its Morningstar Analyst Rating of ´ and Positive People rating. However, we’ll be watching turnover on the investment team. Impact: Negative Date: 07/01/2016 Manager Taymour Tamaddon moved to run T. Rowe Price Institutional Large Cap Growth TRLGX. Ziad Bakri took his place on July 1, 2016. Bakri had been a healthcare analyst with the firm since 2011. He is an M.D. and had previously worked as a biotech analyst for Cowen and Co. Our Take: This is a challenge for T. Rowe because it follows the loss of a manager and two healthcare analysts in 2014. The firm says it plans to hire additional analysts. This is Bakri’s first time serving as a portfolio manager. Impact: Negative Date: 10/01/2016 Greg McCrickard is set to retire in October. He will be replaced by Frank Alonso, who has been an associate portfolio manager on the fund since 2013. Alonso has been with T. Rowe Price since 2000. Our Take: We don’t have much of a track record to go by for Alonso, so it’s a big drop from the proven McCrickard. We lowered our rating to ˇ from Silver. Date: 07/10/2016 Wellington as sole manager. Our Take: Higgins was responsible for the higher-risk half of the fund, so this may moderate the fund’s profile as Palmer has more of a classic value approach. We are maintaining our ˇ rating. Impact: Neutral Date: 07/10/2016 Vanguard fired subadvisor M&G Investment, which was running 12% of assets. Those assets were handed to the other two subadvisors, Baillie Gifford Overseas and Schroder Investment Management. Baillie will now manage 60% of assets and Schroder 40%. Our Take: M&G’s comanager Charles Anniss had only been on the fund since October 2014, and his predecessor was only on the fund for two years, too. It may be that turnover prompted the change, and in any case M&G wasn’t why we had a Silver rating on the fund. We are maintaining our • rating. Impact: Neutral MFS Global Equity MWEFX Perkins Global Value JGVAX T. Rowe Price Health Sciences PRHSX T. Rowe Price Small-Cap Stock OTCFX Vanguard Capital Value VCVLX Impact: Neutral Vanguard International Growth VWIGX

Vanguard Dividend Growth Closes to New Investors Vanguard announced on July 28 that Vanguard Dividend Growth VDIGX has closed to new investors. Assets topped $30 billion. It is welcome news, as I wouldn’t want asset growth to overwhelm Welling- ton’s ability to run the fund. It has a Morningstar Analyst Rating of Gold, as Donald Kilbride has done a great job. “Vanguard is proactively taking steps to slow strong cash flows to help ensure that the advisor’s ability to produce competitive long-term results for investors is not compromised,” said Vanguard CEO Bill McNabb. “We have long been committed to protecting the interests of our funds’ shareholders, and demonstrate this conviction by closing or restricting funds to stem further growth.” Closing without warning is a shareholder-friendly way to avoid a final blast of cash from investors. It is also encouraging that Vanguard wanted to maintain Kilbride’s influence over the whole portfolio rather than add another subadvisor who would water down his contribution. Westport Funds to Merge Into Hennessy Funds We criticized Westport funds for lacking succession plans, and now it has announced plans to merge its funds into Hennessy Cornerstone Mid Cap 30 HIMDX . The boards of Westport WPFRX and Westport Select Cap WPSRX approved the merger to convert the funds into institutional shares of the Hennessy fund. The next step is for shareholders of the funds to vote on the proposal in September 2016 . If approved, the merger will happen Sept. 26 , 2016 . The fund is a 3 -star mid-blend fund charging 0 . 96% in expenses. It has $1 billion in assets, and it is run by Brian Peery and Neil Hennessy. We don’t have a Morningstar Analyst Rating on the fund. If I owned a Westport fund, I probably would sell and look for a