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14

Mairs & Power Fund Closing

Mairs & Power Small Cap

MSCFX

will close to new

investors on Sept.

30

,

2016

. With assets currently

at

$277

million, the fund still has room to grow, but

capacity is key for this concentrated, low-turnover

strategy. The firm has long held that the fund will

close by the

$500

million mark, a figure that takes

into account small caps in other strategies, including

Mairs & Power Growth

MPGFX

. (That fund is

projected to close at around

$5

billion.) This decision

to close the fund while it is still nimble will help

managers Andrew Adams and Allen Steinkopf con-

tinue to implement the strong process that contrib-

utes to the fund’s Morningstar Analyst Rating of Silver.

CalPERS Lowers Expectations

The California Public Employees’ Retirement System

has lowered its return expectations to

6

.

2%

. That is a

sensible action in light of the low bond yields out

there. It is a good reminder for the rest of us to expect

modest returns in the future and make sure our plans

will still work if they come to pass.

T. Rowe Price Health Sciences Slightly Open

T. Rowe Price Health Sciences

PRHSX

said it will

now allow new accounts via financial intermediaries

only as of Sept.

1

. The fund had previously been

closed to all new investors. We rate the fund Neutral.

Champlain Small Company Cuts Fees

Champlain announced that

Champlain Small

Company

CIPSX

will cap its expense ratio at

1

.

20%

on

its retail share class. The fee cap went into effect

on Sept.

1

. The move takes expenses down to about

even with the small-cap no-load median of

1

.

18%

.

We rate the fund Silver.

Vanguard Leads Flows Through July

Vanguard’s open-end funds have taken in net

$111

billion through July. That puts Vanguard miles ahead

of the second-place asset-gatherer,

DFA

, which

has brought in

$13

billion. DoubleLine is next with a

Fund Manager Changes

Fund News

MFS Global Equity MWEFX

Impact: Negative Date: 2017

MFS announced that longtime lead manager David Mannheim will retire in one to two years. Ryan McAllister

will join the fund as a comanager in September 2016. Roger Morley, who has been a comanager since 2009,

will remain on board.

Our Take:

Mannheim has done a great job and will be missed. While Morley is a seasoned

MFS veteran who has a successful record running a fund on his own, McAllister doesn’t have as much

experience, though he has been at the firm since 2007. Also, Morley and McAllister will continue to draw on the

work of a strong group of analysts. We still have faith in the fund but have cut our rating one notch to

.

Oakmark Global OAKGX

Impact: Negative Date: 09/30/2016

Oakmark International OAKIX

Rob Taylor surprised us by announcing he will retire at age 44. At Oakmark Global, David Herro will take Taylor’s

spot alongside Clyde McGregor. At Oakmark International, lead manager Herro will be the sole manager,

though he still has the help of senior analysts at the firm.

Our Take:

We are maintaining our

Œ

ratings on the

funds as we have faith in Herro. However, the change does underline the importance of succession planning

at the firm, and we’ll be watching closely as McGregor and Herro draw closer to retirement age. McGregor is 63

and Herro is 55.

Perkins Global Value JGVAX

Impact: Negative Date: 07/10/2016

Tadd Chessen, who joined Perkins Investment Management in April 2013 as an international analyst and was

named comanager of Perkins Global Value later that year, has left the firm. His departure comes just a year

after comanager Christian Kirtley left to rejoin ICAP, his employer prior to Perkins. Firm CIO and lead manager

Greg Kolb remains in place. Kolb has overseen this fund since 2005 when it was run out of parent company

Janus; he and the fund moved to value subsidiary Perkins in 2010. Meanwhile, George Maglares, an analyst

who joined Perkins in 2013, has been promoted to comanager.

Our Take:

Given Kolb’s history with the fund,

it retains its Morningstar Analyst Rating of

´

and Positive People rating. However, we’ll be watching

turnover on the investment team.

T. Rowe Price Health Sciences PRHSX

Impact: Negative Date: 07/01/2016

Manager Taymour Tamaddon moved to run T. Rowe Price Institutional Large Cap Growth TRLGX. Ziad Bakri took

his place on July 1, 2016. Bakri had been a healthcare analyst with the firm since 2011. He is an M.D. and

had previously worked as a biotech analyst for Cowen and Co.

Our Take:

This is a challenge for T. Rowe because

it follows the loss of a manager and two healthcare analysts in 2014. The firm says it plans to hire additional

analysts. This is Bakri’s first time serving as a portfolio manager.

T. Rowe Price Small-Cap Stock OTCFX

Impact: Negative Date: 10/01/2016

Greg McCrickard is set to retire in October. He will be replaced by Frank Alonso, who has been an associate

portfolio manager on the fund since 2013. Alonso has been with T. Rowe Price since 2000.

Our Take:

We don’t have much of a track record to go by for Alonso, so it’s a big drop from the proven McCrickard. We

lowered our rating to

ˇ

from Silver.

Vanguard Capital Value VCVLX

Impact: Neutral

Date: 07/10/2016

Vanguard removed Peter Higgins from this fund, leaving David Palmer of Wellington as sole manager.

Our Take:

Higgins was responsible for the higher-risk half of the fund, so this may moderate the fund’s profile

as Palmer has more of a classic value approach. We are maintaining our

ˇ

rating.

Vanguard International Growth VWIGX

Impact: Neutral Date: 07/10/2016

Vanguard fired subadvisor M&G Investment, which was running 12% of assets. Those assets were handed to

the other two subadvisors, Baillie Gifford Overseas and Schroder Investment Management. Baillie will

now manage 60% of assets and Schroder 40%.

Our Take:

M&G’s comanager Charles Anniss had only been on

the fund since October 2014, and his predecessor was only on the fund for two years, too. It may be that

turnover prompted the change, and in any case M&G wasn’t why we had a Silver rating on the fund. We are

maintaining our

rating.