Allianz Global Investors Value
, which in August 2008 got a new name and management team, will merge with Allianz NFJ Large Cap Value
, pending shareholder approval. NFJ Investment Group has run the $755 million Allianz NFJ Large Cap Value fund since its inception in 2002 and recently took over the $547 million Global Investors Value fund, which had struggled during the short tenure of Oppenheimer's Colin Glinsman. NFJ cofounder Ben Fischer heads up a team that also includes experienced managers Paul Magnuson, Jeffrey Partenheimer, and Tom Oliver. They have successfully practiced a deep-value, dividend-focused strategy at other charges, including Allianz NFJ Dividend Value
, which reopened to investors in May 2008. The proposed merger will bolster the fund's asset base and could potentially mean lower fees.
Katie Rushkewicz Reichart, CFA, is a senior analyst covering equity strategies on Morningstar’s manager research team.
In a year when most equity funds have faced steep losses, many investors are wondering if they will also be stuck paying taxes on capital gains distributions. Dodge & Cox, whose funds have fallen hard this year, announced
that only Dodge & Cox International
, which has lost half of its value this year, will make capital gains distributions. The estimated short-term distribution (securities held for less than a year are taxed at a higher rate) is $0.06 per share, or less than 0.3% of the fund's current net asset value. The estimated long-term distribution is $1.41 per share, or 6% of the fund's current net asset value as of Nov. 12.
Matthews Asian Funds announced
that nine of its 10 funds will make capital gains distributions in December. Some of the long-term distributions are especially sizable. Matthews China
, which is down 56% in 2008, will make an estimated long-term distribution of $6 per share, or roughly 34% of its current net asset value. Matthews Pacific Tiger
, down 51% for the year, will distribute about one fifth of its current net asset value with an estimated long-term distribution of $2.93.
Wasatch Global Opportunities Fund
will launch Nov. 17. Robert Gardiner, who successfully ran Wasatch Micro Cap
from 1995 to 2007 and Wasatch Small Cap Value
from 1997 to 2002, has relinquished his role as director of research to run this fund with Blake Walker of Wasatch International Opportunities . The fund will primarily focus on out-of-favor small- and micro-cap companies that are trading at low valuations relative to their earnings growth potential and will include a mix of domestic and foreign stocks. Wasatch's research efforts are commendable, but the fund's 2.25% expense ratio is steep.
PIMCO is planning to launch PIMCO Unconstrained Tax Managed Bond Fund
in 2009. Although the fund can invest across the fixed-income spectrum, it will devote at least 50% of its assets to municipal bonds (which are exempt from federal taxes) and will limit exposure to the Alternative Minimum Tax. PIMCO managing director Chris Dialynas, who has been with the firm since 1980 and currently manages several of the firm's funds, will run the new offering.
Fidelity Fund Reopens
Fidelity Mid-Cap Stock
reopened to investors Oct. 13. It closed to new investors in April 2006 after swelling to $12.6 billion in assets and ranking as the second-largest mid-growth fund. Investors have steadily pulled money out of the fund since November 2007 as the credit crisis unfolded. The fund had nearly $2 billion in net redemptions in October 2008 alone, and the fund's assets have since shrunk to $5.3 billion.
Although the fund has slimmed down, it's still a behemoth compared with its average mid-growth peer, which has assets of $165 million. Size has hampered the fund in the past, forcing it to invest more heavily in large-cap stocks and limiting the impact of individual holdings. While the fund is relatively cheap and has amassed a decent record under manager Shep Perkins, its large asset base is still a concern.
Van Wagoner Funds Get a Makeover
Shareholders recently approved several changes at the volatile Van Wagoner funds. Husic Capital Management has come on board as subadvisor, and the funds will get new names and strategies. Analyst Pan Van Wagoner Emerging Growth
will be known as Embarcadero Small-Cap Growth and will focus on small-cap companies. Van Wagoner Small Cap Growth
will change to Embarcadero All-Cap Growth and take a classic growth approach.
The funds have experienced wild swings in performance under manager Garrett Van Wagoner, who has kept the portfolios highly concentrated in startup tech companies. Exorbitant fees have taken a bite out of returns, and the funds are consistently at the bottom of the small-growth category. Although new subadvisor Husic employs a more diverse small-cap strategy, these funds hardly seem worth it. Husic briefly ran Vanguard Capital Opportunity
from 1995 to 1997 but was axed for poor performance.
RiverSource's New Blood
Todd White will join RiverSource as the structured assets team leader Nov. 17. He will comanage several bond funds, including RiverSource Diversified Bond
, RiverSource Limited Duration Bond , RiverSource Short Duration U.S. Government
, RiverSource U.S. Government Mortgage , and RiverSource Balanced
. White previously worked at HSBC and Lehman Brothers, specializing in mortgage-backed securities.