Plus, a strong mid-cap fund reopens, manager changes, and more.
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By Andrew Gunter | 01-03-08 | 02:07 PM | Email Article

Several PIMCO funds now have new managers. Mihir Worah has taken over the firm's real-return strategy funds from John Brynjolfsson, who will stay at PIMCO but spend more time on client relationships and macroeconomic research. Worah will manage  PIMCO Real Return ,  PIMCO Commodity Real Return ,  PIMCO RealEstateRealReturn , and PIMCO Real Return Asset . Brynjolfsson will, however, continue to run some of these same strategies in separate accounts.

Andrew Gunter is a fund analyst with Morningstar.

This change doesn't concern us because the infrastructure that has made these funds a success remains in place. Brynjolfsson will still work with PIMCO's huge real-return team. Worah has been a team member since joining the firm in 2001. See this article for more on PIMCO, including details about PIMCO Total Return's  manager Bill Gross having just won Morningstar's 2007 Fixed-Income Manager of the Year Award.

Westport Reopens Mid-Cap Fund
Mid-blend fund Westport Select Cap  is open again. This could be a good opportunity for those seeking a proven mid-cap offering. The fund has been managed by the same team since its late 1997 inception, and it has a 10-year record worth cheering. Comanagers Andrew Knuth and Edmund Nicklin have delivered a 12.5% annualized gain in that time period, better than 90% of rivals. And, it's likely Westport will reclose the fund once it balances redemptions with inflows, which is the purpose of this move. It first closed the fund in 2002 to preserve its managers' ability to invest in smaller stocks, such as those whose market caps are still less than $2 billion.

Matthews Adjusts Manager Lineup
Several Matthews funds have made modest manager adjustments. Matthews CIO Mark Headley has stepped back from lead roles at  Matthews Pacific Tiger  and  Matthews Korea  in order to focus on his health. Sharat Shroff has become a lead comanager at Pacific Tiger with Richard Gao, and Headley will support them as comanager. Similarly, Michael Oh becomes lead manager at the Korea fund, with Headley staying aboard as comanager along with Michael Han. Finally, joining Headley on the Asia Technology fund is Lydia So as an additional comanager, with Michael Oh remaining as lead skipper there. Matthews is known for the depth of its team and its experience investing across the Pacific, so we think shareholders of these funds are still in good hands.

Applause for Lower Expenses
Laudus Rosenberg International Equity  is now cheaper. The foreign large-blend fund has capped its expense ratio at 1.40% for investor-class shares, down from 1.64% (though it remains a bit pricey versus its typical no-load rival). MFS Emerging Growth , which competes in the large-growth group, also lowered expenses to 1.15% from 1.26%, making it cheaper than most large-growth funds with front-end loads.

Putnam Raises Sales Loads
The expense news wasn't all good for investors, however, as Putnam raised sales loads nearly across the board on its lineup. Sales loads on A shares of domestic-equity funds such as the flagship Putnam Fund for Growth & Income  will rise to 5.75% from 5.25%. For taxable and tax-free bond funds, sales loads rise to 4.0% from 3.75%. For further commentary on bond-fund sales loads, we recommend this article. In it, we discuss loads' impact on the returns of bond funds, especially those with typically lower yields, such as short-term offerings and government-bond funds.

 

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Andrew Gunter has a position in the following securities mentioned above: PTTRX Find out about Morningstar's editorial policies.
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