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14
Apple Owned by Four Fifths of Large-
Growth Funds
They love iPhones in China. This is why
Apple
AAPL
just reported a mind-bogglingly large profit of
$13
.
6
billion in the past quarter. The stock has been
vital to large-cap-growth fund performance. So,
I wasn’t surprised to see that
81%
of actively
managed large-growth funds own shares of Apple.
True, there are some notable holdouts, such as
Sequoia Fund
SEQUX
,
Primecap Odyssey Growth
POGRX
,
Janus Twenty
JNTFX
, and
Fidelity New
Millennium
FMILX
.
Should you dump them for missing one of the great
growth stocks? I wouldn’t. I like independent
managers who don’t force a stock into the portfolio
if it doesn’t fit their strategy.
Matthews Asia Dividend Reopens
•
-rated
Matthews Asia Dividend
MAPIX
reopened to investors at the end of April
2015
.
The fund had
$722
million in net outflows in
2014
,
though it had
$68
million in inflows in the first
quarter of
2015
.
T. Rowe Price Health Sciences to Close
T. Rowe Price said it will close its wildly popular
T. Rowe Price Health Sciences
PRHSX
to new
investors as of June
1
,
2015
. The fund has
$13
.
6
billion in assets, so the move is a welcome one. The
fund’s success has come from its emphasis on
small- and mid-cap health-care stocks—in particular
biotech stocks. Asset bloat threatens to force
the fund into larger, slower-growing pharma names.
Janus Venture and Triton to Close
Janus announced it will close
Janus Venture
JAVTX
and
Janus Triton
JATTX
to new investors as of
May
15
. The funds saw flows dip with the departure
of managers Chad Meade and Brian Schaub,
but performance has been strong enough to renew
Fund Manager Changes
Fund News
AMG GW&K Core Bond MBDFX
Impact: Neutral
Date: 02-28-15
AMG fired PIMCO and replaced it with GW&K. It also renamed the fund from its former name AMG Managers
Total Return Bond Fund. The fund had been a near clone of PIMCO Total Return PTTRX but will now be run
by institutional money manager GW&K. Mary Kane will serve as manager. Kane has a brief two-year tenure at
AMG GW&K Enhanced Core Bond Investor MFDAX, which has performed well during her tenure.
|
Our
Take: The fallout from Bill Gross’ departure keeps coming. GW&K has a good reputation, but we don’t cover
any of its funds yet.
Buffalo Mid Cap BUFMX
Impact: Negative
Date: 01-05-15
Kent Gasaway left the fund to focus on Buffalo Small Cap BUFSX, and Dave Carlsen replaced him as
comanager. Bob Male remains as comanager.
|
Our Take: This is the second round of manager changes
at Buffalo in recent years, and it comes amid slumping performance. In addition, Carlsen doesn’t have a long
and meaningful track record. Thus, we have downgraded the fund to
x
from Bronze.
Columbia Acorn ACRNX
Impact: Negative
Date: 05-01-15
Columbia Acorn USA AUSAX
Lead manager Rob Mohn plans to retire in the fourth quarter of 2015. In addition to comanager David Frank,
Zach Egan and Fritz Kaegi were named comanagers of the fund to prepare for Mohn’s departure. No
managers were added to Columbia Acorn USA, where William Doyle serves as Mohn’s comanager. In addition,
Acorn is moving to a more traditional PM/analyst division of labor in which analysts will no longer add
stocks and choose their portfolio weighting.
|
Our Take: Poor performance has spurred wrenching changes at
the funds. We have put both funds under review. We lowered Columbia Acorn’s Morningstar Analyst
Rating to Neutral in 2014 because of concerns about redemptions and poor performance. Columbia Acorn
USA had been rated Bronze.
Perkins Mid Cap Value JMCVX
Impact: Negative Date: 04-05-15
Comanager Jeff Kautz resigned. Kevin Preloger, who was named comanager in April 2013, remains and
will be joined by Justin Tugman of Perkins Small Cap Value JSCVX.
|
Our Take: The fund has been
trying to get back on track after several years of underwhelming performance. The fact that its five-
year results aren’t up to par isn’t surprising or disappointing given the fund’s relatively conservative process,
but weak stock-picking is more cause for concern. The loss of a long-tenured manager is disappointing
but not insurmountable. Risk-adjusted results since inception remain strong. However, the departure, coupled
with the fund’s stock-picking woes, is enough to move this fund’s Morningstar Analyst Rating to
´
from Silver.
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
x
. 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
•
.
Vanguard Convertible Securities VCVSX
Impact: Negative Date: 06-01-15
Veteran manager Larry Keele is stepping down and being replaced by Stuart Spangler.
|
Our Take: Oaktree is
an excellent firm so we remain confident in the fund, but it’s still a blow to lose Keele, who has built a great
record here. We lowered our rating to
´
.