(PUB) Morningstar FundInvestor

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Fund News

Fund Manager Changes

Fidelity Dividend Growth FDGFX Impact: Negative 01-01-14 Ramona Persaud is replacing Larry Rakers on the fund. Rakers is moving to Fidelity’s asset-allocation group. | Our Take: Rakers’ strong track record and Persaud’s short record make this a negative change. We have lowered our rating to Neutral becuase of Persaud’s brief record. However, one positive is that Persaud is likely to follow a true dividend growth strategy whereas Rakers was a wide-ranging investor with a penchant for cyclical stocks. The move may be a logical extension of Fidelity’s effort to make its Equity Income funds actu- ally focus on dividends for a change. Vanguard and T. Rowe Price run dividend growth strategies that have produced excellent risk-adjusted returns. Impact: Neutral 01-27-14 Charles Johnson is no longer a named manager. | Our Take: Johnson hasn't been involved on a day-to-day basis at the fund for a long time, so we're happy to see Franklin acknowledge reality. This doesn't have much effect on the fund, and we are maintaining our Bronze rating. Impact: Neutral 06-30-14 Ted Wendell will step down as comanager. Howard Appleby, Jean-Francois Ducrest, and James LaTorre will continue to run the fund. | Our Take: Wendell’s retirement isn’t a surprise, and we have faith in the three remaining managers to keep the fund on course. We have retained our Gold rating. Impact: Negative 01-29-14 Comanager Charles Lahr left PIMCO. Comanager Anne Gudefin will now fly solo. | Our Take: Both Gudefin and Lahr have plenty of experience and a strong record, so there’s nothing to panic about. Still, it’s a loss to see Lahr go. The fund is supported by just four analysts, so it was already a pretty lean operation to begin with. We have placed the fund Under Review. Impact: Negative 03-01-14 Mohamed El-Erian is leaving PIMCO. Mihir Worah will take his place as lead manager. Worah runs inflation- protection strategies for PIMCO. | Our Take: Losing the heir apparent to Bill Gross is a blow for all of PIMCO, including this fund. Although Worah is mostly a bond manager, he has other experts on stocks and tail-risk hedging who will help with the fund. Given the fund’s disappointing record, it will be interesting to see if Worah makes changes to its strategy. We have placed the fund’s rating Under Review. Impact: Negative 12-17-13 Longtime comanager Ken Feinberg has been removed and was replaced by analyst Danton Goei. Goei had been regarded as the firm’s top analyst. | Our Take: This was a surprise, and we are disappointed to see a key contributor leave. We have downgraded the funds to Bronze as a result. The change may also result in a drop in financials exposure, as Feinberg was a big fan of financials whereas Goei has had greater interest in other sectors. Impact: Negative 01-16-14 Rob Bartolo resigned and was replaced by Joe Fath. Fath served as an associate portfolio manager on T. Rowe Price Institutional Large Cap Growth TRLGX. | Our Take: Fath has a decent record as an associate portfolio manager, but it isn’t the same as having the final say on a portfolio. In addition, we want to see what process tweaks are in the works. We have lowered our rating to Neutral from Bronze. Impact: Neutral 01-01-14 Ian Kelson has stepped down, and Arif Husain has replaced him. Husain joined T. Rowe Price in August 2013 as head of international fixed income. Prior to T. Rowe Price, he was a director of European fixed income at AllianceBernstein. | Our Take: The fund has struggled of late, so we’re not too bothered about a change at the helm. We’ll be watching for any strategy changes. We are keeping the fund at Neutral. Franklin Income FKINX Harbor International HAINX PIMCO Eqs Pathfinder PTHDX PIMCO Global Multi Asset PGMDX Selected American SLADX/Davis NY Venture NYVTX/Clipper CFIMX T. Rowe Price Growth Stock PRGFX T. Rowe Price International Bond RPIBX

Artisan Global Value to Close Our Morningstar Fund Manager of the Year winners are closing their fund in February. Artisan Global Value ARTGX is set to close to new investors on Feb. 14 . Managers David Samra and Dan O’Keefe have done an outstanding job there. Although the fund has just $ 1 . 5 billion in assets, they run a few billion more in separate accounts as well as the $ 11 billion in Artisan International Value ARTKX . Primecap Fund Closed Primecap Odyssey Aggressive Growth POAGX closed to new investors as of Jan. 20 . The fund took in $ 2 billion in assets last year, and the closing is a welcome development. The fund was the only one in the Primecap stable that has most of its assets in small- and mid-cap stocks, and it has made the most of that advantage to deliver stellar returns. We rate it Gold. Final Data for Buy the Unloved As promised, here’s an update on which cate- gories are unloved and loved, with final 2013 fund flow totals. The most loved categories are foreign large-blend, diversified emerging-markets, and large-blend. The unloved are large-growth, commodities, and precious metals. PIMCO Heir Apparent Departs PIMCO announced that CEO and co-chief investment officer Mohamed El-Erian will be stepping down from those roles and departing PIMCO in mid-March 2014 . Notably, El-Erian plans to stay on as a member of parent company Allianz’s International Executive Committee and to advise that firm’s Board of Manage- ment on global economic and policy issues.

The impact of El-Erian’s departure isn’t likely to be game-changing in the short term. He has served as a