10
Last year at this time, I looked at three funds in tran-
sition, so I thought I’d take a second look now that
the transitions are history. Today, we have greater
clarity on where these funds are headed.
Columbia Value & Restructuring
UMBIX
was going
through the most dramatic change as longtime
manager David Williams retired and handed the reins
to growth-oriented Guy Pope, who ran
Columbia
Contrarian Core
LCCAX
. At first, Columbia said Pope
would run the fund in a similar value style to Will-
iams. Then the firm said the style would be something
of a combination of the two strategies. Today, Co-
lumbia has owned up to the fact that Pope has turned
the fund into a clone of Contrarian Core. The funds
are now more or less the same and, in fact, may merge.
Pope has done a pretty good job in his growth strat-
egy, but if you bought the fund to serve as your value
anchor, it’s time to move on. Columbia has done a
poor job of communicating these changes.
That said, Pope’s record at Contrarian Core is pretty
good. The fund has earned a Bronze rating and has
performed well in Pope’s eight years at the helm. He
employs a fast-trading contrarian growth strategy
that features growth stalwarts like
Apple
AAPL
and
Google
GOOG
alongside slower-growth stocks like
Philip Morris
PM
and
Chevron
CVX
.
First Eagle Global
SGENX
continues to earn inves-
tors’ confidence as its enlightened conservatism
has held up well amid the market meltdown. Jean-
Marie Eveillard was still at the helm in the
2008
and
2009
bear market, so these mini drops are valu-
able tests to see if the new managers have the
chops. Matt McLennan, Abhay Deshpande, and Kim-
ball Brooker Jr. had the foresight to build cash to
23%
in February so that the May-June decline didn’t
hurt too much. Part of the fund’s defense is resources
stocks such as
PotashCorp
POT
and gold-mining
stocks, and those defenses didn’t work as slowing
Chinese growth has punished those stocks.
The fund has impressed in rallies and in dips since
Eveillard retired.
Third Avenue did a much better job of explaining its
plan for transition at
Third Avenue Value
TAVFX
. Ian
Lapey was named comanager in
2009
, and it was
clear he would become the lead manager when Marty
Whitman retired. So it was no surprise when he took
over in
2012
. In addition, Lapey explained in advance
that he would dial down the fund’s massive bet on
Hong Kong real estate. As it so happened, he did just
what he said he would do. The fund has performed
well in its first year under Lapey, though I wouldn’t
read too much into that.
A new question, though, is what to make of the new
comanagers named to this fund at the beginning
of
2013
. Third Avenue said it wanted a team structure
on all of its funds. Victor Cunningham, Yang Lie, and
Michael Lehmann are now comanagers. Lehmann is a
Third Avenue veteran who has been with the firm
since
1998
. Lie has been with Third Avenue since
1996
.
Cunningham joined in
2012
. Prior to that he had
worked at his own firm, and before that he worked at
Olstein Funds. It doesn’t appear that these latest
additions have led to a big change in the strategy or
portfolio, but it will bear watching.
œ
First Eagle Soars While Columbia Value
& Restructuring Takes a Sharp Turn
The Contrarian
|
Russel Kinnel
Our Contrarian Approach
I go against the grain to find
overlooked funds that may be
ready to rally.
Fund Name
Morningstar
Analyst Rating
Morningstar
Category
Morningstar
Rating Overall
Total Ret %
Rnk Cat1 Yr
Total Ret %
Rank Cat 3 Yr
Total Ret %
Rank Cat 5 Yr
P/E Ratio
Managers
First Eagle Global SGENX
•
World Allocation
QQQQQ
14
4
1
16.04
Abhay Deshpande; Matthew B.
McLennan; Kimball Brooker, Jr.
Third Avenue Value TAVFX
•
World Stock
QQ
30
76
57
9.10
Ian Lapey; Michael R. Lehmann;
Victor Cunningham; Yang Lie
Columbia Value and Restructuring UMBIX
‰
Large Blend
QQ
14
68
92
17.34
Guy W. Pope; J. Nicholas Smith
Data as of July 31, 2013.
