Nearly midway through 2010 the average domestic-stock fund is up more than 6% through May 5, despite uncertainty about the strength of the economic recovery, the sustainability of the more-than-year-long rally, and the knock-on effects of the Greek financial bailout and spreading European-debt crisis.
Most stock funds have managed to climb this wall of worry, but some have not. Following this section is a list of domestic-stock funds with the biggest year-to-date losses as of May 4, 2010.
Solar power and other green energy stocks have hurt socially responsible investing funds. Gabelli SRI Green (SRIAX) , a concentrated mid-cap blend offering, is down 4.4% versus the category's 9.2% return. Eight of its top 10 holdings, totaling almost 30% of the fund's assets, are in the red this year, and four of those are down more than 30%. Electric power and solar firms such as American Superconductor Corporation (AMSC) and Canadian Solar (CSIQ) are down 32.8% and 44.0%, respectively. Neuberger Berman Climate Change (NBCAX) is down 3.6%, hurt by stocks such as energy and transportation data firm Telvent GIT SA (TLVT) (also the top holding in Gabelli SRI Green); it is down by 31.4% in 2010. Almost half of the fund's stocks are negative for the year.
Large-growth funds, which have lagged other categories over the past decade, are trailing again this year. Prudential Jennison 20/20 Focus (PTWAX) is down 3.1%, while the typical large-growth fund is up 3.2% and the S&P 500 Index is up about 5%. As of the most recent publicly available portfolio, more than 25 of the fund's 40 holdings--representing almost 60% of assets--were down for the year. It still has a strong long-term record, though, gaining an annualized 6.7% since its 1998 inception, crushing the typical large-growth fund and the index.
Domestic-Stock Funds with Biggest Year-to-Date Losses
| ||Category||YTD Return (%)|
|Gabelli SRI Green (SRIAX) ||Mid-Cap Blend||-4.4|
|Neuberger Berman Climate Change (NBCAX) ||Large Growth||-3.6|
|Prudential Jennison 20/20 Focus (PTWAX) ||Large Growth||-3.1|
|Neuberger Berman Select Equities (NBEAX) ||Large Growth||-2.2|
|Quaker Capital Opportunities (QUKTX) ||Large Growth||-2.1|
Data as of 5-4-10.
T. Rowe to Launch a Fund for Itself
This week, T. Rowe filed to offer a fund just for other T. Rowe funds to invest in. T. Rowe Price Real Assets will launch in June and own shares of commodities, real estate, basic materials, equipment, utilities, and infrastructure firms. T. Rowe funds-of-funds manager Ned Notzon will run it.
There's a good chance that T. Rowe plans to use the new fund in its target-date retirement funds, though it has not said so. Fidelity and MFS have created similar internal funds for use in their target-date funds. If T. Rowe intends to use the new Real Assets fund to provide an inflation hedge and add an asset class that doesn't correlate with equities to its target-date mix, it might be disappointed. The products of the companies may achieve those goals, but this fund will invest in the businesses' stocks.
Fidelity Shuffles Managers
Fidelity recently announced a number of manager changes. First, Rich Fentin, who had managed Fidelity Value (FDVLX) since 1996, is retiring. He's being replaced by Matt Friedman, who will also take over from Fentin on Fidelity Advisor Value (FAVFX) . Friedman, who will comanage the funds with Fentin for a three-month transition period, will manage a portion of the funds. The remainder of assets will be managed by a team of Fidelity Select sector-fund managers: Shadman Riaz, Stephen Barwikowski, John Mirshekari, Laurie Bertner, and James Justin Bennett. They'll join as co-portfolio managers in June, and each will keep his or her portion of the fund sector-neutral.
Friedman is being replaced as manager of Fidelity Advisor Value Strategies (FSOAX) by Tom Soviero, who will continue to manage Fidelity Leveraged Company Stock (FLVCX) , Fidelity Advisor Leveraged Company Stock (FLSTX) , and Fidelity Convertible Securities (FCVSX) . He'll also continue to comanage Fidelity Advisor High Income Advantage (FAHYX) .
Finally, effective June 30, Jonathan S. Kasen will take over as portfolio manager of Fidelity Select Energy Service (FSESX) , succeeding John Dowd. Dowd will continue to manage Fidelity Select Energy (FSENX) and Fidelity Select Natural Resources (FNARX) and serve as a comanager of Fidelity Stock Selector (FDSSX) .
Neuberger Berman Liquidates Fund
Neuberger Berman liquidated Neuberger Berman Small/Mid Cap Growth (NBATX) on May 28, 2010. The less-than-4-year-old, $1.5 million fund, a combination of Neuberger Berman Small Cap Growth (NBMIX) and Neuberger Berman Mid Cap Growth (NMANX) , never caught on with investors.
Wasatch Closes Fund
Wasatch Advisors announced Wednesday that Wasatch Micro Cap Value (WAMVX) will close to new investors on May 26. The firm's director of mutual funds, Eric Huefner, said the firm chose to close the fund before it reached a critical point so existing shareholders could still invest in the fund, which currently has about $200 million in assets.
Matthews Debates China Bubble
Andrew Foster, In-Bok Song, and Henry Zhang, members of the Matthews Asia investment team, recently held a round-table discussion called "A Possible China Bubble." Among the topics they covered: Zhang anticipates slowing growth in two areas--property development, because it's already a big portion of GDP and there's high ownership in cities, and infrastructure, because China has the second-largest expressway in the world--while Song and Foster pointed to development opportunities outside China's major urban centers. They also discussed how the country's financial system accounts for debt and leverage, a possible property bubble, and China's currency.
Ameriprise Financial (AMP) closed its acquisition of Columbia Management from Bank of America (BAC) , which was first announced in September 2009. Ameriprise Financial's RiverSource funds will be combined with Columbia under the Columbia name, while the Seligman and Acorn fund brands will survive. A slew of manager changes accompanied the acquisition, so investors should keep an eye out for fund filings and updated Morningstar analyses.
As fund analyst Harry Milling noted earlier this week, the board of Charles Schwab's (SCHW) Laudus Rosenberg funds has opted to liquidate the funds in the wake of a recently disclosed error made by the funds' subadvisor, AXA Rosenberg.
The expense ratio for TCW Growth Equities (TGGEX) has been capped at 1.20% for both share classes. Also, TCW Focused Equities (TGFFX) has been renamed TCW Concentrated Value.
Matthews International Capital Management, LLC, renamed Matthews Asian Technology (MATFX) to Matthews Asia Science and Technology to better reflect its investment strategy. The fund's strategy and ticker remain unchanged.
Nile Capital Management launched Nile Pan Africa, which will focus exclusively on the African continent using a mix of macroeconomic research and bottom-up fundamental research.
Schwartz Investment Counsel Inc., the manager of Ave Maria mutual funds, launched Ave Maria World Equity, the family's sixth fund. Also, the management fees for Ave Maria Catholic Values (AVEMX) and Ave Maria Growth (AVEGX) have been reduced to 0.95% annually from 1.00% annually.
Ivy Funds launched Asset Strategy New Opportunities, a go-anywhere fund that will focus its equity allocation on small- and mid-cap companies around the globe, including emerging and frontier markets.
Russell Shtern joined the management teams of DWS Blue Chip (KBCAX) , DWS Growth & Income (SUWAX) , and DWS Disciplined Market Neutral (DDMAX) .
Joseph MacDougall replaced Telis Bertsekas as portfolio manager of MFS Technology (MTCAX) .
Michael Faloon is no longer comanager of Dreyfus High Yield Muni (DHYAX) . James Welch remains as the fund's sole portfolio manager.
Alex McDougall joined the portfolio-management team of BlackRock International Value (MDIVX) .
Pending shareholder approval, Credit Suisse Large Cap Value (WFGIX) and Credit Suisse Mid-Cap Core (CUWAX) will merge into Credit Suisse Large Cap Blend (CFFAX) .
Harness Absolute Return (HIARX) will liquidate all assets by May 14, 2010.
Mutual fund analysts Harry Milling and David Falkof contributed to this report.
Courtney Goethals Dobrow is a fund analyst at Morningstar.