(PUB) Morningstar FundInvestor

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Fund News

Fund Manager Changes

Artisan Mid Cap ARTMX Impact: Negative 09-30-13 Andy Stephens is no longer the lead manager on this fund, but he remains team leader and is listed as a comanager. Matt Kamm is now the lead manager. Stephens had been sole manager for the first four years at this fund until another comanager, Jim Hamel, was promoted in 2001. Kamm, who joined the team as an analyst in 2003 and became an associate manager in 2010, has contributed to strong stock selection in health care over the years. | Our Take: Having Stephens dial down his contribution here is a negative, although his continued involvement and Kamm’s experience give us confidence. Plus, Hamel is still on board as are two other experienced comanagers. We are maintaining our Silver rating on this closed fund. Impact: Negative 09-30-16 Scott Satterwhite, who comanages three Artisan Value funds, is set to retire in three years. Dan Kane was promoted to comanager, joining Jim Keiffer and George Sertl as the trio that will run things when Satter- white retires. | Our Take: While the loss of Satterwhite is a negative, he has a good team around him, and Artisan certainly has plenty of lead time to prepare for his departure. We’re maintaining our ratings on the funds. Impact: Positive 10-04-13 Laudus has hired back former manager Lawrence Kemp. I wrote in last month’s Fund Manager Changes that the fund had gotten a new comanager, but I was disappointed Laudus hadn’t followed Kemp to BlackRock. Lo and behold, Laudus announced in October that it is moving the fund from subadvisor UBS to BlackRock, Kemp’s new home. | Our Take: This is very good news for shareholders. We’re maintaining the rating at Neutral because Kemp is still in the process of building his team at BlackRock, but the ingredi- ents are there for a good fund down the road. Impact: Neutral 11-17-13 PIMCO has replaced lead manager Saumil Parikh with Mohamed El-Erian. El-Erian will review the fund’s allocation moves, which have not been timed well. | Our Take: The fund was designed to be cautious, so its lagging returns recently are no shock, but the fund has been disappointing even in the context of cautious allocation strategies. On one level, having El-Erian take over looks like an upgrade. However, PIMCO is reviewing the fund’s allocation strategy, and we’re always wary of funds when the Under Con- struction signs go up. We’re rating the fund Neutral. Impact: Negative 10-30-13 Comanager Virginie Maisonneuve was hired away by PIMCO. She had been a comanager of this fund’s Schroders-run sleeve since 2005. Schroder runs about one third of the fund, and Simon Webber, who has been listed since 2009, will be the sole manager of the Schroder sleeve. | Our Take: Maisonneuve was the second-most senior manager on the fund, so it’s a blow. However, as she was a comanager of only one third of the fund, it’s far from a disaster. The other slices are run by experienced managers at Baillie Gifford and M&G Investment Management. We are reviewing our rating, and I will send out an email alert when we have published the new report. Impact: Negative 11-17-13 Longtime manager Graham French is stepping down, and comanager Randeep Somel is replacing him. | Our Take: The move appears to have more to do with a slump in a broad equity fund that the two managed for M&G Investment. We are putting the rating under review while we look into the change. We don’t expect a change in strategy, but French has done well at this fund even if the global strategies have suffered. Artisan Small Cap Value ARTVX, Mid Cap Value ARTQX, and Value ARTLX Laudus US Large Cap Growth LGILX PIMCO Global Multi Asset PGMDX Vanguard International Growth VWIGX Vanguard Precious Metals and Mining VGPMX

GMO Says U.S. Stocks Are Overvalued Ben Inker of GMO says equities are overvalued. “The U.S. stock market is trading at levels that do not seem capable of supporting the type of returns that investors have gotten used to receiving from equities.” Specifically, he forecasts a negative 1 . 3% annual- ized return for U.S. equities after taking out inflation over the next seven years. Bronze-rated T. Rowe Price New Horizons PRNHX will close to new investors after the market’s close on Dec. 31 . The fund’s category-topping performance over the trailing three- and five-year periods has attracted $ 1 . 5 billion of new money since January 2012 . Inflows and market appreciation have pushed assets up to $ 14 . 3 billion as of October, making it the biggest actively managed small-cap fund. Silver-rated $ 9 . 5 billion T. Rowe Price Small-Cap Stock OTCFX and its $ 1 . 5 billion clone, T. Rowe Price Institutional Small-Cap Stock TRSSX , will also close to new investors after the market’s close on Dec. 31 , given inflows. Bronze-rated T. Rowe Price Small-Cap Value PRSVX , which has $ 9 . 4 billion in assets and has experienced net outflows in 2013 , remains open. Although the fund is huge, I can’t really quibble with the timing of the closing. The fund hasn’t had meaningful inflows since 2004 , the last time it closed. Here are its annual net flows starting in 2005 : $ 59 million, negative $ 650 million, nega- tive $ 971 million, negative $ 97 million, $ 13 million, negative $ 110 million, and negative $ 332 million. This year it has taken in $ 183 million. T. Rowe Price Shutting Two Funds to New Investors Capital Gains Estimates From Vanguard and Calamos Vanguard and Calamos have come out with capital gains estimates for year-end. At Vanguard, the biggest estimate is about 10% for Vanguard Explorer VEXPX .