(PUB) Morningstar FundInvestor

November 2013

Morningstar FundInvestor

15

been a decent performer in the two and a half years since hiring its current managers, but that’s a very short record. The long term has been less glorious. Vanguard U.S. Growth’s 15 -year investor return is negative 2 . 8% annualized. Finally, Vanguard will merge two of its managed- payout funds, Vanguard Managed Payout Distri- bution Focus VPDFX and Vanguard Managed Payout Growth Focus VPGFX , into a third (and then only) managed-payout option, which will be renamed Vanguard Managed Payout Fund . At the same time, Vanguard will lower that fund’s targeted distri- bution level to 4% from 5% . Vanguard is also paring back some purchase and re- demption fees at three index funds. Vanguard FTSE All-World ex-US Small-Cap Index VFSVX charges 0 . 50% when you buy and another 0 . 50% when you sell. That’s coming down to 0 . 25% coming and going. Vanguard Short-Term Corporate Bond Index VSCSX will drop its 0 . 25% purchase fee so that there’s no fee on either end. Vanguard Intermediate-Term Corporate Bond Index ’s VICSX purchase fee will be cut to 0 . 25% from 0 . 50% . It has no redemption fee. It’s rare for Vanguard to merge away funds. In the 1990 s the firm decided its tech fund was too risky, and it merged it away. In the 2000 s it merged its Florida muni fund away when the Florida intangibles tax was eliminated. Matthews Pacific Tiger Closes Gold-rated Matthews Pacific Tiger MAPTX closed to new investors on Oct. 25 . The $ 7 . 6 billion Asia fund has been a standout under Richard Gao and Sharat Shroff. They ply a value-conscious approach to growth investing that has worked quite well over time. The fund invests in just about every market in Asia except for Japan, so besides big names like South Korea and China, investors get exposure to the likes of Indonesia, Thailand, and Malaysia. Vanguard is also lowering the minimum for a slew of Admiral shares for institutions and advisors.

Oakmark International Closes Oakmark International OAKIX closed on Oct. 4 . It’s an excellent Gold-rated fund, but it has doubled in assets in just a year, so this is an important step. Fidelity Files for 2 Event-Driven Funds Fidelity recently submitted paperwork with the SEC seeking permission to create two long-only, event- driven funds. The proposed funds, Fidelity Event Driven Oppor- tunities and Fidelity Advisor Event Driven Oppor- tunities , would invest in stocks in a special-situation event, such as firms undergoing a corporate reorgani- zation, a change in beneficial ownership, changes to their capital structure, or a management change. Fidelity’s Arvind Navaratnam, who does not manage any other mutual funds, would be the proposed funds’ portfolio manager. The funds are expected to launch around Dec. 11 . PIMCO Hires Schroders Veteran PIMCO announced it has hired Schroders PLC manager Virginie Maisonneuve to head its global equities group. Maisonneuve is best known to U.S. investors as one of the managers of Vanguard International Growth VWILX . The hire fills a void left by Neel Kashkari, who had been the first in the position. The choice of Maison- neuve signals PIMCO is taking a more traditional route this time. See Fund Manager Changes for more on the impact to Vanguard International Growth. Value Managers Snap Up Apple Shares Once purely the domain of aggressive-growth man- agers, Apple AAPL is now being purchased by value managers. The addition of a dividend and a relatively modest P/E no doubt boosted its appeal. Vanguard Wellington VWELX and T. Rowe Price Equity Income PRFDX were among the top buyers in the second quarter. Wellington bought 334 , 000 shares and T. Rowe Price Equity Income bought 100 , 000 in the second quarter. œ