(PUB) Investing 2015

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Matthews Pacific Tiger Reopens
Matthews Pacific Tiger MAPTX reopened to new
investors in August. The fund, with a Morningstar
Analyst Rating of Gold, had experienced outflows of
$217 million in July though it had net inflows of
$400 million for the year to date.
Strange Pricing for ETFs
Ben Johnson, director of global ETF research for
Morningstar, shared his take on the wild behavior of
some exchange-traded funds on Monday Aug. 24:
“What we saw during the first hour or so of trading on
Monday was near-total chaos, and that was expressed
and manifest in the disconnect we saw between the
prices of certain ETFs and their underlying net asset
value. So, there was some disconnect between ETF
prices and the actual underlying value of the securities
they own.
“There are two notable cases. The Guggenheim Equal
Weight S&P 500 ETF RSP and PowerShares S&P
500 Low Volatility ETF SPLV traded at extreme dislo-
cation with declines in excess of 30% or more during
that first hour of trading.
“Later, they came back into line. They traded at or near
their net asset values for the remainder of the trading
day, but this had sort of many investors scratching
their heads and wondering, ’What am I to do?’ and
certainly, the best answer was to do absolutely
nothing, to sit tight and to ride out the volatility. But
again as we saw in the case of the flash crash, there
were certain orders that were filled at these prices,
and there were investors that may ultimately experi-
ence some real losses as a result of having sold during
this very chaotic first hour of trading.
“The root cause of these disconnects of these trading
anomalies is still somewhat uncertain. I think
that uncertainty—actually that we saw during the
first hour of trading—that chaos, that panic—was
Fund Manager Changes Fund News
Buffalo Small Cap BUFSX Impact: Negative Date: 07-20-15
Kent Gasaway stepped down for health reasons. Comanagers Bob Male and Jamie Cuellar remain at the fund.
| Our Take: Gasaway has been a leader at Buffalo, so his departure stings. In addition, it comes as the fund is
mired in a slump and nearly half the fund’s assets have gone out the door this year. The combination of these
three factors leads us to lower the fund’s rating toˇ 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 portfolio manager/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 ˆ. 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.
Matthews China MCHFX and Matthews Pacific Tiger MAPTX Impact: Negative Date: 07-01-15
Richard Gao has stepped down from his roles as the lead manager on Matthews China and as a comanager on
Matthews Pacific Tiger. Comanager Andrew Mattock will take over on Matthews China, and Sharat Shroff will
remain lead manager on Matthews Pacific Tiger. | Our Take: We have placed both fundsØ. It looks
like a much bigger blow to Matthews China. Mattock is a seasoned investor, but he only joined Matthews this
year. Shroff is an established and proven skipper at Matthews Pacific Tiger, and he, like Mattock, has an
exceptional support team.
T. Rowe Price Growth & Income PRGIX Impact: Neutral Date: 06-01-15
Jeff Rottinghaus took over for Thomas Huber. Huber remains at T. Rowe Price Dividend Growth PRDGX.
| Our Take: Huber has done a fine job here and at T. Rowe Price Dividend Growth, but Rottinghaus has a solid
five-year record at T. Rowe Price U.S. Large-Cap Core TRULX. There, he has produced five-year returns of
17.3% annualized versus 17.04% for the S&P 500 and 16.45% for the large-blend category. However, that fund
has only $116 million in assets, so Rottinghaus now has more on his plate with this $1.5 billion fund.
Vanguard Convertible Securities VCVSX Impact: Negative Date: 06-01-15
Veteran manager Larry Keele stepped down and was 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 ´.
Weitz Value WVALX Impact: Negative Date: 12-31-15
Wally Weitz is stepping down from management responsibilities here. However, he will remain manager at Weitz
Partners Value WPVLX and Weitz Hickory WEHIX. Comanagers Brad Hinton and Dave Perkins will take over his
responsibilities. | Our Take: Weitz’s departure from the fund is a loss, but he’s been working on the transition for
years, and we feel good about Hinton and Perkins. We are maintaining our rating of •on the fund.
Westwood SMidCap WHGMX Impact: Negative Date: 08-10-15
Susan Schmidt was named manager, replacing Ragen Stienke whose "employment has been terminated,"
according to Westwood. Schmidt has 20 years' industry experience, including six years running the Mesirow
Financial SMid Cap Value strategy. Schmidt joins comanagers Grant Taber, Thomas Lieu, and Prashant
Inamdar at the fund. The 3-star fund had been a mediocre performer for the past five years, though it enjoyed
a strong run of relative performance from 2006–08. | Our Take: Schmidt is experienced, though we don’t have
a mutual fund track record. The change seems a minor negative given Stienke’s middling record.