(PUB) Morningstar FundInvestor

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Fund News

Fund Manager Changes

PIMCO Global Multi-Asset PGMDX Impact: Negative 03-01-14 Mohamed El-Erian left PIMCO. Mihir Worah took his place as lead manager. Worah runs inflation-protection strategies for PIMCO. | Our Take: Losing the heir apparent to Bill Gross is a blow for all of PIMCO, including this fund. Although Worah is mostly a bond manager, he has other experts on stocks and tail-risk hedging who will help with the fund. Given the fund’s disappointing record, it will be interesting to see if Worah makes changes to its strategy. Impact: Negative 03-31-14 James Moffett is transitioning off the fund over the course of the year. In a letter to clients, he said current comanager Michael Stack will be promoted to co-lead portfolio manager on March 31 and become sole lead on Jan.1, 2015. Moffett plans to remain at the firm, though he won’t be a named manager on this fund. Stack has been with Scout since 2006 and has 18 years of investment experience. Michael Fogarty remains a co-portfolio manager. | Our Take: Moffett’s departure isn’t a surprise given his age (72), but it’s still a loss. During the past three years, we downgraded the fund’s rating first to Silver and then to Bronze because Moffett was several years past conventional retirement age, and discussions with him indicated that he was preparing successors. While Stack and Fogarty are steeped in the process, they don’t have the track records of lead managers that would have led us to keep the fund at Silver. We have placed our rating Under Review. Impact: Negative 06-30-14 Amit Wadhwaney is leaving. Matthew Fine, who has comanaged the fund since 2012 and had been an analyst on the fund since 2003, will take over as the lead manager. Wadhwaney’s exit comes in the wake of other departures from the international team. In April 2013, Jakub Rehor, who had been a long-tenured analyst and named to the fund’s portfolio-management team in January 2013, left the firm. Two other analysts also left that month, though Third Avenue has since brought them back as consultants. | Our Take: Wadhwaney and the analysts’ departures are a big blow, and we’ve downgraded the fund to Neutral. Impact: Neutral 12-31-13 Jason Schrotberger, who has been with Turner Investments since 2001, is the new manager. While he was a comanager at Turner Midcap Growth TMGFX for about five years and at Litman Gregory Masters for four years, we don’t have a record where he was the lead manager. | Our Take: We don’t have an Analyst Rating on the fund but hope to have one later in the year. Impact: Negative 01-16-14 Rob Bartolo resigned and was replaced by Joe Fath. Fath served as an associate portfolio manager on T. Rowe Price Institutional Large Cap Growth TRLGX. | Our Take: Fath has a decent record as an associ- ate portfolio manager, but it isn’t the same as having the final say on a portfolio. In addition, we want to see what process tweaks are in the works. We have lowered our rating to Neutral from Bronze. Impact: Neutral 03-31-14 Vanguard is adding Pzena Investment Management to the roster of firms managing the fund. Pzena will start small and gradually build up as Vanguard sends inflows the firm’s way. Barrow Hanley runs 74% of assets and Donald Smith & Co. runs 26%. | Our Take: This will have little impact at first but may matter down the road. Pzena is a deep-value firm with a strong long-term track record, but it was hit hard in 2008. Impact: Negative 12-31-13 Longtime lead manager George Greig retired, leaving Simon Fennell and Jeffrey Urbina to run the fund. The two were named comanagers in May 2013. Fennell joined the firm in 2011, and Urbina joined in 1996. | Our Take: It’s a big blow to lose Greig, and we’ve downgraded the fund to Neutral from Bronze. Urbina has run William Blair International Small Cap Growth WISIX since 2005, and the fund has roughly equal returns to the category over that time period. Scout International UMBWX Third Avenue International Value TAVIX Turner Small Cap Growth TSCEX T. Rowe Price Growth Stock PRGFX Vanguard Selected Value VASVX William Blair International Growth WBIGX

Money Markets to Keep a Stable $1 NAV The Wall Street Journal reports that the fund industry has convinced the SEC to allow money markets for individual investors to keep a stable $ 1 net asset value. Thus, money market reforms may be focused on higher-risk institutional accounts. The industry has pointed out that the only problems have arisen at prime money market funds aimed at institutions. Fidelity Taps Prior as New Fixed-Income Chief On March 7 , Fidelity named Nancy D. Prior as presi- dent of the firm’s fixed-income division. Prior replaced Charlie Morrison, who had recently taken over as Fidelity’s head of asset management when Ron O’Hanley left the firm in February. Prior has been at Fidelity for a little more than a decade and got her start with the firm as a member of its fixed-income legal team, before serving as a managing director of credit research in charge of a team focused on financial services and structured products. Most recently, she headed up Fidelity’s money markets group and spearheaded its efforts to influence money market reform. In 2013 , she took over responsibility for the firm’s short-duration bond portfolios, a group that expanded its lineup recently with the launch of several new products focused on the short end of the yield curve. In her new role, Prior will continue to work closely with Bob Brown, president of the bond group, and Christine Thompson, the bond group’s chief invest- ment officer. Both Brown and Thompson are longtime veterans of Fidelity’s fixed-income team. Brown will reassume responsibility for the short-duration bond team, which reports to Thompson. Meanwhile, Prior will retain direct responsibility for the firm’s money markets group.