10
A fund closing to new investors is rarely a permanent
move. Eventually the fund will face enough out-
flows to prompt it to reopen. That’s often a wonderful
contrarian buying opportunity.
Every once in a while a fund will be closed for so long
that it needs to reopen because its existing share-
holder base is in redemption mode. But more often a
fund reopens because redemptions force its hand.
And more often than an aging shareholder base, the
cause is a slump in performance. So, you’ve got to
be a bit of a contrarian to hop on the reopening. I’ve
selected six Morningstar Medalists that are good
bets to reopen in the next couple of years. So, add
the ones you like to your watchlist, and they might
become available.
AllianzGI NFJ Small-Cap Value
PNVDX
got a little
larger than management wanted, and the firm went
so far as to cull a portion of its
401
(k) business. That
tells me it may let assets shrink a bit more before
reopening. Still, this
$7
.
7
billion fund has shed
$1
.
3
billion in the past
12
months ended July
2014
, and
that’s a fair amount to handle. The fund has a Morn-
ingstar Analyst Rating of Silver as it still has the
same excellent strategy and management it’s had all
along. Yes, the three-year Morningstar Return
ranking is weak, but it is top
10%
for the trailing
10
years, and its dividend-oriented strategy is a
good one.
Royce Premier
RYPRX
is a Gold-rated fund in a
slump. Poor five-year returns have led to
$1
.
3
billion
in outflows at this
$6
.
6
billion fund. But we are
still confident in Chuck Royce and Whitney George.
They look for low debt levels and fundamentals
like solid return on invested capital and free cash
flow. By Royce standards, the
50
-
70
stock portfolio
is concentrated.
Aston/Tamro Small Cap
ATASX
has seen only a
modest
$240
million go out the door over the past
12
months, but the fund has only
$963
million left, so
it may be the best bet here to reopen in the near
future. Managers Philip Tasho and Tim Holland meld
earnings growth and valuations into a tame small-
growth portfolio. The long-term record remains strong
even though the fund’s
2013
was a dud.
Lazard Emerging Markets Equity
LZOEX
has
produced outstanding returns over all the trailing time
periods, yet it has seen
$900
million in outflows. It
still has
$16
billion in assets under management,
so I count the fund on the less likely to reopen side,
but take a close look if it does. James Donald’s mild-
mannered but flexible value strategy has been quite
consistent. The fund has outperformed peers in eight
of the past
10
years.
Perkins Small Cap Value
JSCVX
hasn’t been open
for a while, but it’s currently in one of its downward
ebbs, so keep your eyes peeled. The Perkins crew
runs a focused value style that produces solid long-
term results and occasional slumps. The folks who
make out like bandits are the ones who buy after the
slumps rather than after the rallies. The fund has
lost about a third of its assets the past year, and it is
now down to
$1
.
9
billion in assets.
Fidelity Small Cap Value
FCPVX
is one of my
favorite Fidelity funds. Chuck Myers runs a focused
Buffett-style small-cap fund that really sets it apart
from other Fidelity funds. It behaves differently
from most other Fidelity funds, making it a good diver-
sifier for those with all-Fidelity portfolios. With
$900
million in outflows the past
12
months, this
fund might just reopen come
2015
.
œ
A Closed-Fund Watchlist
The Contrarian
|
Russel Kinnel
Our Contrarian Approach
I go against the grain to find
overlooked funds that may be
ready to rally.
