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Big Outflows for PIMCO Total Return
PIMCO
reported that
PIMCO Total Return
PTTRX
suffered
$19
.
4
billion in outflows in December.
That’s a significant jump from November though less
than in October. It’s a sign that
PIMCO
isn’t out
of the woods yet.
This new wave of redemptions is likely a reflection
of the deliberate speed at which most
401
(k)s move
when making changes. The people overseeing
the plans may have felt that, while a change wasn’t
urgent, they should move on from a fund with so
much turmoil.
The fund’s performance continues to indicate that
flows have not been a hindrance, but we’ll be
watching closely to see if they remain at an uncom-
fortably high level.
In other respects, news has been good at
PIMCO
.
The firm has seen some important managers and
analysts return to the fold since Bill Gross departed.
Perkins Small Cap Value Reopens
Perkins Small Cap Value
JSCVX
has reopened to
new investors as of Jan.
2
,
2015
. The fund, which
has a Morningstar Analyst Rating of Silver, suffered
$800
million in redemptions through November
2014
and
$778
million in redemptions in
2013
. The fund’s
assets under management are down to
$1
.
8
billion.
Russian Sell-Off Hits Emerging-Markets
Bond Funds
The dramatic drop in the value of Russian debt and
the ruble in December took its toll on broad
emerging-markets bond indexes and a number of
funds dedicated to the space.
Fund Manager Changes
Fund News
American Century Small Cap Value ASVIX
Impact: Negative Date: 11-01-14
Lead manager Ben Giele has left the fund in the hands of comanagers Jeff John and Miles Lewis.
|
Our Take:
Giele had a strong track record, and John and Lewis have brief track records. In fact, Lewis has none while
John has been a comanager only since 2012. We lowered our Morningstar Analyst Rating to Neutral as a result.
First Eagle Global SGENX, First Eagle Overseas SGOVX
Impact: Negative Date: 10-09-14
Comanager Abhay Deshpande has departed. Matthew McLennan and Kimball Brooker Jr. remain as managers.
|
Our Take: The funds remain in good hands, but they look a little shorthanded with more than $60 billion to
manage. First Eagle let these funds get quite large before closing Overseas, and that’s quite a lot for the two
managers to handle. We lowered the funds’ ratings to Bronze from Silver.
Janus Global Research JAWWX
Impact: Neutral
Date: 12-01-14
Jim Goff stepped down as head of research and nominal manager of this fund. Carmel Wellso succeeds him.
|
Our Take: This is a research fund that delegates stock selection to the analysts. In this case, the named
manager doesn’t have the same impact as at a typical actively managed fund.
PIMCO Foreign Bond (USD-Hedged) PFODX and
Impact: Negative Date: 09-26-14
PIMCO Foreign Bond (Unhedged) PFBDX
Scott Mather is now lead manager at PIMCO Total Return, and these funds have been handed over to Andrew
Balls, Sachin Gupta, and Lorenzo Pagani.
|
Our Take: It smarts to lose Mathers, though Balls is a seasoned
veteran. We lowered the funds to Bronze from Silver.
PIMCO Low Duration PLDDX
Impact: Negative Date: 09-26-14
Bill Gross has been replaced by Scott Mather and Jerome Schneider.
|
Our Take: We downgraded the fund to
Bronze from Gold. Outflows and redemptions make us a little wary, but the managers are seasoned veterans.
PIMCO Total Return PTTRX, Harbor Bond HABDX and
Impact: Negative Date: 09-26-14
AMG Managers Total Return Bond MBDFX
Bill Gross bolted for Janus and was replaced by Scott Mather, Mark Kiesel, and Mihir Worah. Dan Ivascyn
takes over as chief investment officer.
|
Our Take: Despite positives, there are some big unknowns about how
the new arrangement will work, so we have lowered our rating to Bronze.
Royce Low Priced Stock RYLPX and Royce Premier RYPRX
Impact: Neutral
Date: 11-10-14
Whitney George has left Royce after being mired in a severe slump. At Royce Low Priced Stock, Jim Stoeffel
is now the lead manager. He had been an assistant manager since 2013 and worked for Royce since 2009. At
Royce Premier, Chuck Royce shifts from comanager to sole lead manager.
|
Our Take: Stoeffel produced
decent results during a previous stint at CRM Small Cap Value CRISX, so there are some positives here, but he
doesn’t have George’s track record. The firm says that Royce Low Priced Stock will return to its roots with
lower-priced stocks and will shed the materials stocks that have killed performance. We lowered that fund to
Neutral. Premier’s change is less dramatic. George’s half of the portfolio will go to Royce, who was already
running the other half. We rate Royce Premier Silver.
T. Rowe Price International Stock PRITX
Impact: Negative Date: 04-01-15
Bob Smith is set to step down this year; Richard Clattenburg will take his place. Clattenburg has been with
T. Rowe Price since 2005, serving as an analyst and associate portfolio manager.
|
Our Take: Clattenburg lacks
a record, so it’s a big drop from the seasoned Smith. We’ve lowered our rating to Neutral.