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14
U.S. Domestic-Stock Fund Manager of the Year
Keith A. Lee, Robert E. Hall, Kempton M. Ingersol,
Damien Davis, and Andrew J. Fones
Brown Capital Management Small Company
BCSIX
This fund’s top-percentile finish in
2015
marks a
rebound from its subpar showing the prior year. The
fund has hardly been a laggard, though. It has
placed in the small-growth Morningstar Category’s
top-quartile or better in eight of the past
10
calen-
dar years, including
2008
’s bear market as well as the
rallies of
2009
,
2012
, and
2013
.
Lead manager Keith Lee and fellow-longest-tenured
manager Robert Hall own the entirety of that
record, as does Kempton Ingersol. Lee and Hall started
here in July
1992
and Ingersol at year-end
2000
.
The fund’s benchmark-agnostic, bottom-up stock-
picking leads it to concentrate in certain sectors, and
that worked to its benefit last year. As of late
2015
,
it had an
86%
combined stake in healthcare and tech
versus
53%
for the Russell
2000
Growth Index.
Treading so heavily in these two sectors also reflects
the managers’ preference for firms with the poten-
tial “to save lives, time, money, or headaches.” To find
them, the managers look for companies with good
business models and annual operating revenue of
$250
million or less. Picks that work out can reward
the fund’s shareholders for decades. For example,
top-
10
holding
Incyte
INCY
gained
48%
in
2015
thanks
largely to a promising rheumatoid arthritis drug
currently in its drug pipeline.
U.S. International-Stock Fund Manager of the Year
Robert Lovelace and Team
American Funds New Perspective
ANWPX
This world-stock fund is run by seven named managers
located in the United States, the United Kingdom,
and Asia, each running a sleeve of the portfolio inde-
pendently. Two come from Capital Group subsidiary
Capital International Investors, while the others work
for another subsidiary, Capital World Investors. The
Fund Manager Changes
Fund News
Fidelity Small Cap Discovery FSCRX
Impact: Neutral
Date: 03/14/2016
Chuck Myers will take a six-month leave of absence. Derek Jansen will fill in while he is gone. Jansen runs
Fidelity Small Cap Value
FCPVX, where he worked with Myers before replacing him there.
Our Take:
For a low-turnover fund, we don’t see much risk in Myers taking six months off. We will watch closely, though,
to be sure he comes back on time. Usually managers come back after leaves of absence and pick up right
where they left off, but occasionally they decide not to come back.
Janus High-Yield JAHYX and Janus Flexible Bond JAFIX
Impact: Negative Date: 03/31/2016
Gibson Smith is leaving Janus. Comanager Darrell Waters will take over as lead manager.
Our Take:
We have
downgraded the funds to
ˇ
as this is a big blow to two formerly appealing funds. Smith built up Janus’
bond effort over the past 12 years and was vital to the team.
MainStay ICAP International ICEUX
Impact: Negative Date: 09/30/2016
Lead manager Jerry Senser will retire at the end of September 2016. The firm named Tom Cole co-chief
investment officer and said Matthew Swanson will step down to focus on U.S. strategies.
Our Take:
Senser
has led ICAP since Rob Lyons’ death in 2007. We’ve lowered our rating to
ˇ
from
´
.
T. Rowe Price Health Sciences PRHSX
Impact: Negative Date: 07/01/2016
Manager Taymour Tamaddon is moving to run T. Rowe Price Institutional Large Cap Growth TRLGX. Ziad Bakri
will take his place on July 1, 2016. Bakri has 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 New America Growth PRWAX
Impact: Negative Date: 04/01/2016
Dan Martino will be stepping down as portfolio manager in order to join T. Rowe’s value team. Justin White will
take over T. Rowe Price New America Growth. White has been an analyst at T. Rowe Price since 2008, covering
cable and satellite television, Internet infrastructure, and telecom.
Our Take:
It’s a surprising move, as Martino
had been managing the fund only since May 2013. You don’t often see managers go from the growth side to the
value side. We have placed our Morningstar Analyst Rating for T. Rowe Price New America Growth
Ø
.
Thornburg International Value
Impact: Negative Date: 12/31/2016
Wendy Trevisani gave up her comanager duties on the fund in April 2014 and left the firm in early 2015. Bill
Fries will give up his comanager position on this fund at the end of 2016. Lei Wang is staying put, and he
now has 10 years of experience as a comanager here as well as two decades of investment experience overall.
Di Zhou, who became a comanager on this fund on Dec. 8, 2015, has spent 13 years in the investment field,
including 14 months as an associate manager here.
Our Take:
Two thirds of the three-person team that owns
this fund’s long-term record will be gone at the end of 2016, so we have lowered our Morningstar Analyst
Rating to Neutral.
Vanguard Energy VGENX
Impact: Negative Date: 06/01/2016
Lead manager Karl Bandtel of Wellington Management will retire. Vanguard named Greg LeBlanc, also of
Wellington, comanager of the fund and said he will become the lead manager when Bandtel retires.
Our Take:
Bandtel has a strong track record, so he will be missed. The fund is
Ø
.
Vanguard Windsor II VWNFX
Impact: Negative Date: 01/01/2016
Longtime lead manager James Barrow has retired. Comanagers Jeff Fahrenbruch and David Ganucheau have
replaced him. The two have been comanagers since 2013, and eight years ago Vanguard had said they would
eventually succeed Barrow. Barrow will continue to manage
Vanguard Selected Value
VASVX.
Our Take
:
We knew Barrow would retire in the relatively near future, so this is not a surprise. Still, Barrow’s outstanding
record makes this a real loss. His replacements are seasoned but do not have long track records of their own.
We have lowered our rating to
´
from
•
.