Katie Rushkewicz Reichart, CFA, is a senior analyst covering equity strategies on Morningstar’s manager research team.
Donovan is not the first Fidelity executive to move across town to Putnam. Since Bob Reynolds was named Putnam's new CEO
in July 2008, he has recruited several of his former Fidelity colleagues to join the Boston-based firm, including senior managing director and CFO Clare Richer
, managing director and controller Andra Bolotin
, and portfolio manager David Glancy
. Despite the influx of new faces, plenty of challenges remain for Reynolds and his ranks as they try to reinvigorate the firm's long-struggling fund lineup and improve deep-rooted cultural problems that have plagued Putnam for years.
Oppenheimer Slapped with a Suit
After several of OppenheimerFunds' bond funds tanked
during 2008, the firm's latest challenge may be in court. The state of Oregon has sued the firm, which it had enlisted to manage part of its 529 college savings plan, claiming that excessive risk-taking in Oppenheimer Core Bond
was unwarranted and led to severe losses. The intermediate-term bond fund lost 36% in 2008 after risky bets on commercial mortgage-backed securities went awry. The suit states that the fund, billed as a conservative offering, overstepped its boundaries by using derivatives and knowingly made risky decisions that were inappropriate for a college savings plan. Oppenheimer denies any wrongdoing and is planning to defend itself against the claims.
The troubled fund was part of several other states' college savings plans, including Texas, Illinois, Maine, and New Mexico. Illinois is currently trying to work with the other states to negotiate a settlement. Meanwhile, the firm is also facing lawsuits stemming from losses in Oppenheimer Champion Income
and Oppenheimer California Municipal
The $747 billion PIMCO is planning to launch PIMCO Muni GO Fund
. As its name suggests, the new municipal fund will invest mostly in general-obligation bonds, but it can also stash 20% of its assets in prerefunded bonds, Treasuries, and money market instruments. John Cummings, who in late 2008 replaced Mark McCray as lead manager of all the firm's municipal offerings after middling performance, will lead the effort.
Santa Fe, N.M.-based Thornburg Investment Management launched Thornburg Strategic Municipal Income
on April 14. The new high-yield muni fund will invest in bonds with a range of maturities and credit qualities. Firm veteran George Strickland and Josh Gonze, who have a mixed record at other Thornburg muni offerings, will run the new fund. Christopher Ryon, who joined the firm in mid-2008 from Vanguard, is also listed as comanager. Costs are steep: After fee waivers, the A share will sell for 1.25%.
T. Rowe Price Manager to Retire
Frances Dydasco, lead manager of Fund Analyst Pick T. Rowe Price New Asia
, will retire from the firm in August for personal reasons. Ahn Lu, who has been with the firm for eight years and was recently named comanager, will assume sole responsibility in August.
Dydasco has run the fund since 1996, first as part of a two-member team and then on her own after her comanager departed in 2006. One of the longest-tenured managers in the Pacific/Asia ex-Japan category, Dydasco has produced a solid long-term record at the fund using a moderate-growth strategy.
American Funds Alters Money Market Options
American Funds, the largest fund family in terms of assets under management, is planning to pare back its money market lineup. If shareholders approve the proposal, the firm will go from having two taxable money market funds and one municipal money market fund to just one taxable money market fund. Read more about the changes here
Maurice FitzMaurice is out at Fidelity Select Defense & Aerospace
and Fidelity Select Air Transportation
, which he had managed since May 2008. John Sheehy has taken over Defense & Aerospace and will continue running Fidelity Select Paper & Forest Products . John Mirshekari is the new manager of Air Transportation.
Disgraced former Lehman Brothers CEO Dick Fuld, who led the firm into bankruptcy, has landed at New York hedge fund Matrix Advisors.