15
Morningstar FundInvestor
April 2
013
If you already own a Primecap
fund, should you consider
Vanguard Capital Opportunity? I think their large-
cap funds have
so much overlap
that
it wouldn’t be
necessary to own two. However, if the one
fund
you own
is
Primecap Odyssey Aggressive Growth
POAGX
, then this one makes some sense. Here are
the R-squared figures for
VHCOX
versus the other
funds:
Vanguard Primecap
VPMCX
98
,
Vanguard
Primecap Core
VPCCX
99
,
POAGX
93
,
Primecap
Odyssey Growth
POGRX
97
,
Primecap Odyssey
Stock
POSKX
97
.
Vanguard Limits Sales Channels for 2 Funds
Vanguard announced it will limit flows to Gold-rated
Vanguard Wellington
VWELX
and Silver-rated
Vanguard Intermediate-Term Tax-Exempt
VWITX
.
Advisors, institutions, and individual investors who
transact through third-party platforms (such as Charles
Schwab or
TD
Ameritrade) will not be able to open
new accounts, although they will be able to add to
existing accounts. Both funds will remain open to
those buying directly through Vanguard.
Western Asset Leader to Retire
Steve Walsh, Western Asset’s chief investment officer,
announced that he plans to retire on March
31
,
2014
,
after more than two decades at the firm.
Walsh has managed portfolios for the firm since
1990
,
and he served as deputy
CIO
from
1998
to
2008
. He
stepped in as the firm’s sole
CIO
in August
2008
when
Western’s longtime
CIO
, Ken Leech, stepped back
from his day-to-day duties for medical reasons. Leech,
who received a clean bill of health in mid-
2009
,
will return to the
CIO
post upon Walsh’s retirement.
Walsh and Leech have worked together for
22
years, and during Leech’s tenure as
CIO
from
1998
to
2008
, he and his team were named Morningstar
Fixed-Income Fund Manager of the Year (
2004
) and
received nominations for the award in
2003
and
2006
.
Correction on Yacktman Focused Brokerage Costs
Our report on brokerage costs in February over-
stated the costs for
Yacktman Focused
YAFFX
. The
firm’s original filing had an extra zero that led us
to estimate brokerage costs of
0
.
70%
. However, the
firm’s amended filing revealed that the actual level
is
0
.
07%
, which is below average for a U.S. equity
fund. We have updated our brokerage
PDF
on
mfi.morningstar.com
to reflect the correct figure.
Morningstar Individual Investor Conference
Video Available
If you missed our Individual Investor conference, you
can see the video and read the transcript on
We will post a link to the video
on mfi.morningstar.com as soon as it goes up.
Flows Taper Off in February
After a massive rate of inflows in January, things
quieted down in February.
Particularly noteworthy was the drop in U.S. equities
to $
2
billion from $
16
billion. So much for the great
rotation. Taxable bonds took in $
18
.
6
billion, foreign
equities garnered $
16
.
4
billion, balanced funds
$
4
.
2
billion, alternatives $
4
.
4
billion, sector funds $
2
.
7
billion, muni funds $
2
.
5
billion, and commodities
$
1
billion.
The top-selling categories were diversified emerging
markets with $
6
.
2
billion, followed by foreign large-
blend with $
6
billion in inflows, bank loans with $
5
.
5
billion, and nontraditional bond with $
5
.
1
billion.
The most redeemed categories were large-growth
with $
2
.
6
billion in outflows, intermediate govern-
ment with $
2
.
4
billion in outflows, Treasury Inflation-
Protected Securities with $
1
.
3
billion in outflows,
high-yield with $
600
million in outflows, and short-
term government with $
500
million in redemptions.
PIMCO
led the way among fund companies with $
8
.
5
billion in inflows. Next was Vanguard with $
8
.
1
billion, then T. Rowe Price with $
3
billion, Franklin
Templeton with $
2
.
5
billion, and
JP
Morgan with
$
2
.
3
billion.
Including exchange-traded funds, we saw $
42
billion
go into active funds and $
17
billion go into passive.
œ
