(PUB) Morningstar FundInvestor

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Fund News

Fund Manager Changes

Appleseed APPLX Impact: Negative 06-30-14 Ronald Strauss and Rick Singer are set to retire at the end of June. | Our Take: We are maintaining our Bronze rating because three comanagers remain who have been leading the way. Bill Pekin, Adam Strauss, and Josh Strauss are the managers we’ve spoken to over recent years, and we feel comfortable with them in the lead. Impact: Neutral 04-06-14 Comanager Jerry Palmieri died at age 85. | Our Take: We are saddened to hear of the passing of our first Manager of the Year award winner. From a practical standpoint, Palmieri had not been involved in day-to-day management for a number of years, so we are maintaining our Bronze rating of the fund. 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 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: 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 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. Franklin Growth FKGRX PIMCO Global Multi-Asset PGMDX Scout International UMBWX T. Rowe Price Growth Stock PRGFX Third Avenue International Value TAVIX Vanguard Selected Value VASVX

First Eagle Overseas to Close First Eagle Overseas SGOVX is closing to new investors as of May 9 . The Silver-rated fund has $ 14 . 9 billion in assets. Jerry Palmieri Dies Jerry Palmieri, who had been at the helm of the Bronze-rated, $ 9 . 8 billion Franklin Growth FKGRX since 1965 , died at age 85 . Palmieri was the first-ever recipient of Morningstar’s Fund Manager of the Year award in 1987 . He had been with Franklin Templeton since 1963 and was the longest-tenured manager in the large-growth Morningstar Category. Morningstar managing director Don Phillips, who was with the firm for the very first Fund Manager of the Year award, recalled that the award, aimed at recog- nizing managers’ longer records and attention to risk instead of simply focusing on which manager had produced the highest returns of the year, was a fairly radical idea at the time. In tapping Palmieri, Phillips said, Morningstar was giving kudos both to his solid short-term performance and, more important, to his longer-term track record and ability to make money for his investors. Palmieri and Franklin together had laid out a clear succession plan in 2008 when they tapped Serena Perin Vinton as Franklin Growth’s desig- nated successor. TIAA-CREF Buys Nuveen TIAA - CREF announced that it will acquire Nuveen Investments from private equity firm Madison Dear- born Partners. Both firms have Morningstar Parent Ratings of Neutral. In all, the consolidation of the two firms will bring TIAA - CREF ’s total assets under management up to $ 790 billion from $ 569 billion.