Vanguard Metals and Mining Fund's Manager Departs


On Nov. 19, Graham French, the longtime manager of Vanguard Precious Metals and Mining(VGPMX), stepped down from daily fund management responsibilities at the fund's subadvisor, M&G Investment Management.

French, who had been the fund's lead manager since 1996, has worked at London-based M&G Investment Management since 1989. Morningstar U.K. named him the Global Equity Manager of the Year in 2011, calling him "a truly skilled manager who is clearly passionate about delivering excellent long-term returns to his investors."

French's performance managing the Vanguard precious metals and mining fund had been especially strong over the past 12-month and three-year period, ranking as the top performer in the equity precious metals category. While the typical peer focuses mainly on gold-related stocks, this fund's exposure to a wide variety of commodity producers insulated it from a severe downturn in gold.

French's replacement on the Vanguard fund is his former deputy manager Randeep Somel, who joined M&G Investment Management in 2005. Somel then became a dedicated fund analyst on the Vanguard fund in 2008 before graduating to deputy fund manager in 2010. (Somel was formally promoted to be a named manager in May 2013.) We don't expect drastic changes to the process in the near term, as Somel has been closely involved in the research and management of the portfolio over the past few years. Aside from managing Vanguard Precious Metals and Mining, Somel will also assume lead portfolio manager responsibilities for M&G Global Basics and M&G Managed Growth.

With this manager change, we have placed the fund's Analyst Rating Under Review.

Seeking More Focus From El-Erian, PIMCO Tightens Manager Team on PIMCO Global Multi-Asset
PIMCO this week announced that Saumil Parikh, a comanager for the past year-plus on PIMCO Global Multi-Asset(PGAIX), is stepping off the $3 billion fund as of Nov. 30.

PIMCO is making the change to try to boost the fund's performance, which has been poor. With the change, PIMCO is seeking to have the fund's lead manager, Mohamed El-Erian, focus more of his efforts on managing the fund. To do so, El-Erian will be relinquishing some of his duties managing separate accounts using the total return strategy and will take more of a hands-on role on some of the day-to-day activities on the fund that Parikh had been handling. Parikh, who has been with PIMCO since 2000, will be taking over some of the total return separate accounts that El-Erian had been handling and will retain several key responsibilities at the firm, including his participation on its investment committee.

The other comanagers on the fund are Vineer Bhansali, who oversees tail-risk hedging, and Curtis Mewbourne, who handles security selection. El-Erian historically had handled asset allocation and big-picture issues on the fund.

Before the management change, the fund had been rated Bronze. We have placed the fund's rating Under Review.

New Managers on DWS EAFE Fund After Longtime Manager Departs Subadvisor Northern Trust
A $259 million index fund that is issued by DWS and devoted to non-U.S. developed-markets countries underwent a manager change earlier this month, as its longtime skipper left the fund's subadvisor, Northern Trust, for a new opportunity.

Shaun Murphy, who had been at the helm of DWS EAFE Equity Index(BTAEX) since 2007, stepped off the fund on Nov. 7 and also has left Northern Trust. Murphy, who had been director of international equity index, left Northern Trust to take a job elsewhere in Chicago. According to a news release, in early December, he will join Chicago-based Legal & General Investment Management America as a director of index funds. (Legal & General also has hired Chad Rakvin from Northern Trust as its new head of U.S. index funds. Rakvin previously had been managing director of global equity index.)

Effective Nov. 7, the DWS EAFE fund's new managers are Thomas O'Brien, a vice president with Northern Trust who has worked in the bank's quantitative management group, and Joseph LaPorta, who is an international equity index portfolio manager.

Murphy's exit meant he also stepped down as a comanager of Northern Global Sustainability Index(NSRIX), which O'Brien continues to manage, and Bronze-rated Northern Global Real Estate Index (NGREX), which O'Brien also continues to manage. Murphy also stepped down late last month from the $2.2 billion Northern Emerging Markets Equity Index(NOEMX) and from the $198 million MM MSCI EAFE International Index(MKRAX), which Northern Trust subadvises for Mass Mutual.

In a related move, on Oct. 31, Northern Trust promoted Matthew Peron to be managing director of global equity. He previously had been the bank's managing director of active equity. Northern Trust also elevated Nick Dymond, who had been managing the bank's international equity index portfolio management team in London, to oversee portfolio management teams in Chicago, London, Hong Kong, and Tokyo. U.S. equity index strategies will continue to be overseen by Northern Trust veteran Brent Reeder. In the release, the bank noted that the departures of Murphy and Rakvin accelerated its decision to create a combined global equity platform.

Thornburg Muni-Bond Manager Retires
On Nov. 8, longtime Thornburg municipal-bond manager Christopher Ihlefeld stepped down from portfolio management duties from all of the funds on which he was a named manager and retired from the firm.

As a result, Ihlefeld no longer is a named manager on the $6.6 billion Thornburg Limited-Term Muni (LTMFX), the $164 million Thornburg Strategic Municipal Income (TSSAX), the $482 million Thornburg CA Limited-Term Muni (LTCAX), the $1 billion Thornburg Intermediate Municipal(THIMX), the $210 million Thornburg NM Intermediate Municipal(THNMX), and the $62 million Thornburg NY Intermediate Municipal (THNYX).

Principal Capital Appreciation Adds Comanager
Principal announced that it has added Sarah E. Radecki as a comanager on the $2.3 billion Principal Capital Appreciation(CMNWX).

Radecki has signed on as an associate portfolio manager and senior analyst on the fund, alongside two other experienced managers. Philip M. Foreman has been a manager on the fund since 2002, and Daniel R. Coleman has been a manager on the fund since 2010. Radecki has been with the fund's subadvisor, Edge Asset Management, since 1999.

Director of active fund research Michael Herbst, senior fund analyst Eric Jacobson, and fund analysts Sumit Desai and Robert Goldsborough contributed to this report.

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