| Highlights and Commentary
|
| By Roy Weitz
|
(Originally posted November 1, 1999)
[Archive Table of Contents]
We're making some changes to the Specialty benchmark: Prior to this month, there was one FundAlarm Specialty benchmark, which was computed by averaging the relevant performance numbers of all specialty funds.....As many readers pointed out, this meant that utility funds and technology funds (for example) were lumped together in the same benchmark......Well, as they say, we heard you.....Starting this month, there will be eight separate specialty fund benchmarks, one for each type of Specialty fund.....Each Specialty fund will be compared only to funds within the same category -- in other words, a technology fund will be benchmarked against the average of other technology funds, a utility fund will be compared to other utility funds, and so on......This month's database consists of 471 Specialty funds, which break down as follows:
| Specialty fund area | New FundAlarm
benchmark | # of funds
included | Avg.
12 Mo.
Return
(%) | Avg.
3 Yr.
Return
(%)* | Avg.
5 Yr.
Return
(%)*
|
|---|
| Communications | Specialty-Commun | 18 | 68.84 | 33.52 | 24.78
|
| Financial Services | Specialty-Finan | 52
| 9.80 | 16.49 | 19.22
|
| Health | Specialty-Health | 51
| 13.90 | 10.78 | 16.64
|
| Gold/Precious Metals | Specialty-Metals | 39 | 8.24 | -17.45 | -11.58
|
| Energy/Natural Resources | Specialty-NatRes | 53
| 22.84 | 2.18 | 7.48
|
| Real Estate | Specialty-RealEst | 90 | -3.63 | 4.53 | 8.54
|
| Technology | Specialty-Tech | 82
| 109.59 | 33.12 | 30.87
|
| Utilities | Specialty-Utils | 86
| 14.52 | 17.76 | 15.90
|
* Annualized
To reflect this change in the Specialty benchmark, you'll note that the data table for each specialty fund looks slightly different.....For example, Vanguard Health Care:
| Vanguard Health Care (VGHCX) |
VGHCX |
Mkt.
Cap.
($MM)
| Mgr.
Tenure
(yrs.)
| Net
Assets
($MM)
| Net
Assets
-3 Mo.
| % Chg.
Net
Assets
| Total Annlz'd Return:
Fund for Period (%) |
.
|
| 12300
| 15
| 10700
| 10700
| 0
| 12
Mo.
| 3
Yrs.
| 5
Yrs .
|
| .
| 16.12
| 23.01
| 25.69
| Benchmark Data
|
| Fund return vs. "best" benchmark (+/- %): | 12 mo. | 3 yrs. | 5 yrs
| 2.22
| 12.23
| 9.05
| NO-ALARM
|
| "Down" year return (%): | Fund | Benchmark | Fund vs. benchmark
| 5.38
| -10.89
| 2.49
|
|
| Fund style / Return vs. peer group | Benchmark used
| NA / NA
| Specialty-Health
|
| NA=No data, or fund not in existence for period NB=No benchmark data | Update: November, 1999
|
As you can see above (in red), the "Benchmark used" cell now shows one of the eight new Specialty benchmarks, instead of the old, generic "Specialty" designation.....Also, the data table no longer indicates a "Fund style" for specialty funds (it shows "NA" instead).....Finally, the table no longer indicates "Return vs. peer group" for specialty funds (i.e., "HIGHER" or "LOWER").....Under our new system, a specialty fund that has outperformed its benchmark for the past three years has also, by definition, outperformed the average fund in its peer group, and vice versa.
What about Internet funds?.....Seven Internet funds are included in our new Specialty-Technology benchmark, although they don't have much of an impact on the category averages.....That's because only three of these Internet funds have been around for more than 12 months (Munder NetNet (A & B), Internet, and WWW Internet), and only two have been around for 36 months (Munder Net Net A and WWW Internet).....As you might expect, the few Internet funds that have been in existence for the past 12 months show spectacular returns:
| Name | 12 Mo.
Return
(%) | 3 Yr.
Return
(%)* | 12 Mo.
vs. Bench
(%) | 3 Yr.
vs. Bench
(%)
|
|---|
| Internet (WWWFX) | 245.74 | NA | 136.15 | NA
| | Munder NetNet A (MNNAX) | 143.24 | 60.22 | 33.65 | 27.1
| | WWW Internet (WWIFX) | 155.27 | 37.46 | 45.68 | 4.34
|
*Annualized
What if your Internet fund isn't included in the table above, but you still want to evaluate its short-term performance?..... Or, what if you want to compare your Internet fund to Internet stocks in general, instead of tech funds in general?.....The quick answer is: "Use an Internet stock index".....But that's easier said than done.....As David Futrelle recently noted in Money (November 1999), "we have far more Internet indexes than we need or want."
If you're familiar with how indexes work, you know there's an important distinction between "equal-dollar-weighted" indexes and "market-capitalization-weighted" indexes.....Neither approach is "correct," yet the same basket of stocks can produce very different results under the two different methods.....If you want to benchmark Internet funds or Internet stocks, Futrelle offers some good, common-sense advice.....Until things sort themselves out, it's a good idea to select one index from both categories (dollar-weighted and cap-weighted), learn how it works, and follow it consistently.
Among the cap-weighted indexes, it's likely that the Dow Jones Internet Index will be one of the long-term survivors (other cap-weighted indexes include the Inter@ctive Week Internet index and the USA Today Internet 100 index).....For a dollar-weighted index, you might take a look at TheStreet.com Internet Sector index, or the Business 2.0 Internet index.....One final note: Although several Internet index funds are in registration, we're aware of only one Internet index fund that is currently available to investors: The Guinness Flight internet.com Index Fund, which tracks the cap-weighted ISDEX (Internet Stock Index).
[Links to all of the indexes discussed above can be found by clicking "Selected Web links," at the top of this page, and looking for the links posted in November 1999]
 Dreyfus unveils a silent ad campaign: Remember Mom's advice? "If you can't say something nice, don't say anything at all".....The Dreyfus funds recently announced a new series of TV ads that will contain no spoken words....Viewers will see only pictures of the Dreyfus lions, hanging around in their native African habitat....According to a Dreyfus marketing exec, "Our mission is to portray the inherent images that both Dreyfus and the lion represent: strength, integrity, and intelligence"*.....On the strength front, we note that the 34 Dreyfus funds in this month's FundAlarm database have underperformed their respective benchmarks in 82% of their measurement periods.....Meanwhile, on the integrity side, Dreyfus still hasn't offered an official explanation for disgraced former manager Michael Schonberg and, as far as we know, Dreyfus still doesn't have a plan to prevent similar incidents in the future.....In a step that is "indicative of today's consumer landscape," a Dreyfus spokesperson says that both male and female lions will be featured in the Dreyfus commercials**.....In a further sign of the times, at least one male lion will reportedly get in touch with his feelings, and one female lion will stagger home after spending a wild night on the veldt.
* "Dreyfus Enters Lion's Den With Silent-Ad Campaign," Aaron Lucchetti, The Wall Street Journal, October 4, 1999
**cbs.marketwatch.com, October 6, 1999
Vanguard recently started publishing tax-adjusted performance numbers for all of its stock and balanced mutual funds .....Fund companies have long claimed that investors don't care about such things, which strikes us as a ridiculous statement.....In the past, tax-adjusted numbers haven't been widely available, so how does anyone know what the public really wants in this area?.....In fact, we're pretty sure that investors would pay lots of attention to "net" (tax-adjusted) numbers if fund companies posted them alongside their "gross" numbers.....Tax-adjusted numbers are easy to compute, and the biggest fund companies could perform all the calculations in a few minutes.....And even though a fund's past tax efficiency doesn't always predict the future, trends do become apparent, and investors should be allowed to make their own judgments.
The initial industry response to Vanguard's action has consisted of the usual, tired, non-responsive platitudes....A Fidelity spokesperson says that Fidelity is still considering after-tax returns, but it has "no immediate plans" to provide such information because there "hasn't been much investor demand"*.....A Janus spokesperson ever-so-helpfully cautions investors not to "confuse tax efficiency with great performance".....She continues: "Performance seems to be the thing that our shareholders seem to be most concerned about, and that's our goal"**.....Investors should note that these are the other two leaders in the mutual fund industry.
Sources:
*"Vanguard Plans to Publish After-Tax Returns of Funds," Pui-Wing Tam and Aaron Lucchetti, The Wall Street Journal, October 11, 1999
**"Vanguard Takes Low-Key Approach to Calculating Tax Bite on Its Funds," Joe Bousquin, TheStreet.com, October 12, 1999
Memories are made of this: This month's FundAlarm database contains 64 funds that have gained 100% or more over the past 12 months.....The grandkids probably won't believe you, so you might want to hold on to your account statements:
| Fund | 12 Mo.
Return (%)
|
|---|
|
Nicholas-Applegate Global Tech I (NGTIX) |
478.31 |
|
Firsthand Technology Innovat (TIFQX) |
298.35 |
|
Fidelity Japan Small Co (FJSCX) |
269.46 |
|
Amerindo Technology D (ATCHX) |
253.78 |
|
Internet (WWWFX) |
245.74 |
|
Van Wagoner Emerging Growth (VWEGX) |
229.91 |
|
Nevis Fund (NEVIX) |
222.69 |
|
Matthews Korea I (MAKOX) |
216.83 |
|
Warburg Pincus Adv Japan Sm (WJSAX) |
212.5 |
|
Warburg Pincus Japan Sm Comm (WPJPX) |
211.62 |
| Continued...
|
Ultra Screwed is more like it: This month's FundAlarm database also contains 19 funds that have lost 10% or more over the past 12 months, including the top short-term loser, ProFunds UltraShort OTC......Here's the complete list:
| Fund | 12 Mo.
Return (%)
|
|---|
|
ProFunds UltraShort OTC Inv (USPIX) |
-76.4 |
|
American Heritage (AHERX) |
-56 |
|
Potomac OTC/Short (POTSX) |
-51.6 |
|
Rydex Arktos Inv (RYAIX) |
-48.86 |
|
ProFunds UltraBear Svc (URPSX) |
-39.26 |
|
ProFunds UltraBear Inv (URPIX) |
-38.76 |
|
Prudent Bear (BEARX) |
-36.17 |
|
Comstock Partners Cap Value B (DCVBX) |
-35.83 |
|
Fidelity Select Medical Delivery (FSHCX) |
-26.06 |
|
Comstock Partners Strategy O (CPSFX) |
-24.32 |
|
Fidelity Select Environmental (FSLEX) |
-19.41 |
|
Potomac U.S./Short (PSPSX) |
-19.13 |
|
Rydex Ursa Inv (RYURX) |
-17.99 |
|
ProFunds Bear Inv (BRPIX) |
-17.56 |
|
GAM International A (GAMNX) |
-16.35 |
|
Heartland Mid Cap Value (HRMCX) |
-15.66 |
|
Barr Rosenberg Mkt Neutral Iv (BRMIX) |
-15.49 |
|
Lighthouse Contrarian (LGFTX) |
-14.87 |
|
Alpine U.S. Real Estate Eqty Y (EUEYX) |
-10.4 |
Schwab made its reputation as the objective, straight-arrow alternative to full-service brokers.....Now, it seems that Schwab's reputation -- or at least the most prominent parts of the Schwab Web site -- are up for sale to the highest bidder.....According to TheStreet.com*, Schwab has agreed to promote a new Hambrecht & Quist mutual fund in exchange for a cash payment.....The H&Q fund is the only non-Schwab fund featured on Schwab's Home page and "OneSource" page.....Schwab plans to tout the fund in e-mails to clients and financial advisors, and Schwab also plans to hold a special investor Q&A and conference call.....For its part, H&Q plans to mail about 200,000 promotional postcards to Schwab clients who have accounts of more than $100,000 (presumably these names will come from Schwab, but that's another rant).....The sleaziest part of this deal is, of course, the biggest attraction for Hambrecht & Quist.....Except for some fine print at the bottom of one Web page, Schwab never discloses that it's being paid for promoting this fund.....As you can see below, Schwab's ads for H&Q are designed to blend in perfectly with the rest of Schwab's Web site:
 | 
| | From the Schwab Home page | From the Schwab "OneSource" page
|
Schwab apparently sees nothing wrong with such disguised promotions, and plans to continue them (Schwab acknowledges similar promotions in the past for Janus, Warburg Pincus, and Stein Roe).....Meanwhile, investors need to practice safe browsing.....These days, you never know where Schwab's Web site has been, or who has paid for it.
* "Pay-for-Promotion Deal Gives Some Funds Higher Profile in Schwab Supermarket," Ian McDonald, October 7, 1999
From Schwab's corporate mission statement:
"To provide the most useful and ethical financial services in the world."
 The Big Railroad Company That Couldn't: Kansas City Southern Industries owns about 82% of the Janus fund family.....KCSI also owns a railroad business, the Berger funds, and several other small financial service companies.....Some time ago, KCSI announced plans to spin off Janus and its other financial service properties into one holding company, and KCSI is proceeding with that plan.....But the folks at Janus aren't happy, and the dispute between KCSI and Janus recently made the front page of The Wall Street Journal.....Janus would like to separate entirely from KCSI.....If that isn't possible, Janus would at least like to be its own division.....Janus wants to make its own management decisions, set its own pay scales, award its own equity incentives, and generally not have any dealings with a bunch of railroad people who happened to make a lucky investment 15 years ago.....Oh, and one more thing: Janus doesn't want to share profits with Berger, its sputtering cross-town rival.
Side note: Earlier this year, in the week before Janus Twenty closed, it collected more cash than all the Berger funds currently have under management.
KCSI continues to play hardball with Janus, and refuses to alter its spin-off plans.....But somebody needs to remind KCSI that it isn't exactly the El Duque of the corporate world.....Janus accounts for about 80% of the value of KCSI stock.....If Janus fund managers walk out the door, as they could, the top brass at KCSI might as well move into the courthouse and start planning their defense of the shareholder lawsuits.....It may take a while, and it may be done quietly, but it's hard see how Janus can't get its way.
Can you spot the hidden
image? (answer below)
|
| The human mind likes to find patterns in things, so here are two exercises:
Find the Pattern #1: You meet Joe for the first time at a party, and he starts asking questions about your house:
- What's the address?
- Is anyone home during the day?
- Do you have a security system?
- Where do you keep your valuables?
Pattern #1: Joe wants to rob you.
|
Find the Pattern #2: Flag Investors Communications is a NO-ALARM fund in the Specialty-Communications category.....The fund recently sent proxy materials to shareholders, asking them to:
- Eliminate the fund's fundamental investment policy prohibiting purchases of oil, gas, or mineral interests;
- Eliminate the fund's fundamental investment policy prohibiting the purchase of securities on margin;
- Eliminate the fund's fundamental investment policy prohibiting short sales;
- Modify the fund's fundamental investment policy prohibiting the purchase or sale of commodities and commodity contracts;
- Modify the fund's fundamental investment policy prohibiting borrowing;
- Liberalize the fund's investment policy concerning illiquid securities.
Pattern #2: The fund intends to become more aggressive, and also intends to purchase investments outside of the communications sector.
If you spotted the same two patterns that we did, we're sorry to tell you that the second one is officially wrong.....The co-manager of Flag Investors Communications says that there are no plans to change the fund's approach or move away from the communications sector, and the proposed changes (above) merely represent some legal housekeeping.....The proxy materials say basically the same thing.....For example, the proxy says that the Fund has "no present intention to invest directly in oil, gas or mineral interests".....Unfortunately, language like this only makes things worse: There may be no "present" intention to invest in oil and gas, but what about the future?.....And what are we supposed to make of the word "directly"?....Are they telling us that they do plan to invest in oil and gas indirectly?.....The proxy goes on to say that the fund is asking for the changes now, "to take advantage of the fact that the Fund is holding a shareholder meeting".....But the Fund holds a shareholder meeting every year, so why couldn't these changes wait until next year's meeting, or the one after that?.....Fund investors deserve better communication .....And, if they don't get it, investors are simply not going to trust their funds.....If I owned this fund, I'd read the proxy explanation, and I'd read the manager's explanation, but I'd still rely on my own instincts.....I see a pattern to these changes, and neither the fund nor the manager has convinced me otherwise.....I wouldn't necessarily sell, but I'd watch this fund very closely.
* Many thanks to FundAlarm reader Dennis Halpin for bringing the Flag item to our attention....Dennis saw the pattern, and he also has a tough time believing it isn't there.
 |
| The hidden image is a Dalmatian dog. His nose is sniffing the ground, slightly above the center of the rectangle. His body extends up and to the right. And next time you look, it will be impossible not to see him. If you like this kind of thing, there are many more examples at www.illusionworks.com.
|
 Watch out: Investors in Vanguard Windsor II are having a tough year, but some recent advice by Dan Wiener (editor of The Independent Advisor for Vanguard Mutual Funds) could only make it worse.....Wiener was recently quoted as saying that Windsor II "will come around," but he still recomends that investors sell their holdings now, "in order to avoid a big tax distribution coming up in December"*.....Let's think about this for a minute.....Vanguard estimates that the Windsor II capital gains distribution will be $2.19 per share, or about 8% of the fund's current NAV.....Let's say you invested $10,000 in Windsor II on January 1, 1996....If you follow Wiener's advice, and you sell now, you'd trigger about $4,500 of capital gains, which could generate a tax bill of as much as $900....On the other hand, if you bite the bullet and continue to hold your Windsor II shares, you'll receive a capital gains distribution of about $1,400, with a maximum capital gains tax of $280 (there also might be a small distribution of ordinary income).....In other words, if you follow Wiener's recommendation, you end up paying $620 more in tax than you have to.....With the proceeds from your Windsor II sale, Wiener recommends that you "buy something with a higher tech weighting but that still has some financial exposure and then wait until next year to see if we want to buy [Windsor II] again".....Buy Windsor II again???.....One year after triggering a substantial tax bill???.....Wiener's advice might make sense in a non-taxable account.....His advice also might make sense for someone who bought Windsor II after the date in our example (1/1/96).....But as general advice, this is a case where one size most definitely does not fit all.....It's also a good example of how short-term decisions, motivated by taxes, often don't make sense in the long run.
Assumptions: A $10,000 investment in Windsor II on January 1, 1996 now consists of approximately 650 shares. Current market value is approximately $18,800. Tax basis (with dividends reinvested) is approximately $14,300. Potential gain is therefore $4,500 ($18,800 - $14,300). Potential 1999 capital gains distribution is equal to 650 shares x $2.19 per share, or $1,423.
* Windsor II: Year of the Dog," Joe Hagan, SmartMoney.com, October 21, 1999
Briefly noted:
- Are the Janus funds merely peas in a pod, or are there meaningful differences among them?.....Several media sources (including FundAlarm) have recently propounded the peapod theory.....FundAlarm reader Alfred I. Fiks disagrees.....His article, on the accompanying page, suggests that the Janus funds may be more diverse than many people think.
- We're pretty sure that reading a mutual fund prospectus is nobody's idea of fun.....But it's a necessary and (dare we say it?) almost universally overlooked chore, even by serious fund investors.....FundAlarm reader Thomas Lemke, an attorney specializing in mutual funds, has co-authored a new book,
How to Read a Mutual Fund Prospectus.....Besides being the only book of its type for the general reader, it's also quite good.....The book is currently available only from the publisher, at www.mercerpointpress.com.
- The SEC has proposed a new set of rules that are designed to remove the quotation marks from today's "independent" mutual fund directors.....Among the changes: Independent directors must constitute at least a majority of a fund's Board, up from 40% under the old rules.....Also, independent directors must be nominated and selected by other independent directors, and directors will be required to disclose their ownership of shares within the fund family.....These are all good steps.....And now that directors are required to disclose their fund ownership, how about fund managers?
- Van Wagoner Emerging Growth and Babson Enterprise have turnover ratios of 668% and 22%, respectively.....So, which one is more tax-efficient?.....As it turns out, the Van Wagoner fund has a perfect tax-efficiency rating (100%), while the Babson fund is only 44% tax efficient (i.e., after-tax returns are only 44% of pre-tax returns).....For people (including us) who thought they understood tax efficiency, this is one of several surprises in a recent article by Lewis Braham*.....As Braham points out, the Van Wagoner fund has been using unusually large tax-loss carryforwards to offset recent gains .....Funds like Van Wagoner's demonstrate that high turnover doesn't always result in a large tax bill (also, low turnover doesn't guarantee tax Nirvana)....On the other hand, once Van Wagoner's losses are fully absorbed (which may occur as early as 1999), this tax-efficient fund could become extremely inefficient....This demonstrates another important point: Past efficiency is no guarantee of future efficiency.....Here's still another efficiency consideration: Rapidly-growing funds tend to be relatively tax-efficient, since gains can be distributed over a widening shareholder base.....But when that same fund stops growing, or (even worse) when shareholders start withdrawing cash, it can quickly become inefficient.
*"The Taxing Side of Funds," SmartMoney.com, September 28, 1999
- Growth funds are more tax-efficient than value funds! (And that's not a typo!):
| Tax Efficiency
(100% = perfect) | Turnover
Ratio
|
|---|
Growth
Funds | Value
Funds | Growth
Funds | Value
Funds
|
|---|
| Large-cap: | 84% | 81% | 109% | 95%
|
|---|
| Mid-cap: | 83.2% | 80.2% | 139% | 76%
|
|---|
| Small-cap: | 85.1% | 79.7% | 138% | 59%
|
|---|
|
|
From the Lewis Braham article, discussed above
Value funds typically pay higher dividends than growth funds, and that may be one reason they are relatively less tax-efficient.....It's also possible that growth fund managers are more tax-aware, simply because they have a reputation for being gunslingers.....Some of the extra turnover for growth funds may be due to tax loss "harvesting" -- sales made at a loss, which are specifically intended to offset gains.
- Apparently unable to develop a new 8-track tape player, Zacks Investment Research is introducing two investment products that are likely to generate an equal amount of consumer interest.....Zacks Market Neutral Fund and Zacks Index Plus Fund (also a market-neutral concept) go on sale in November, and they represent the first mutual fund offerings by this data-gathering firm....."For a company that depends on research, we are unbelievably out of touch with the mutual fund marketplace, and it's clear we don't have a clue what we're doing".....That, at least, is what we'd like to hear.....Fat chance.....Yet somebody at Zacks apparently thinks these turkeys will fly, so at least they have some sense of the ridiculous.
- The folks who brought you the Internet Fund have started a new fund, and FundAlarm was there at the moment of creation:
- We don't usually take note of new funds, but this one may be worth your attention.....Legg Mason Opportunity will open later this year, and Bill Miller will be the manager.....Miller, who currently runs Legg Mason Value, is the only diversified fund manager to beat the S&P 500 every year since 1990.....The new fund won't be limited by investment objective, market cap, or geographic area.....It is possible, of course, that Miller has been successful precisely because of his focus on large-cap stocks.....But it's also possible that Miller has had even better ideas in the past, which he was never able to act on.....If the latter is true, this fund really could be an opportunity.....One caveat: The preliminary expense ratio is a steep 1.99%, and that's after a voluntary cap.
- Also, Patrick Adams, the love-him or hate-him manager of Berger fame, is starting his own family of funds.....His Choice Focus fund is due to go on sale about November 1, and should be available soon through fund supermarkets.
- Metropolitan West AlphaTrak 500: It sounds like a fancy piece of gym equipment, but it's actually a new mutual fund with a long-overdue idea.....AlphaTrak 500 is an "enhanced" index fund, and it will be run with a base expense ratio of about .20% to cover administrative expenses (fairly low).....Here's the good idea: The managers will earn their fee based on the fund's performance, which also means that the managers will earn nothing if the fund fails to outperform the S&P 500.....Once the fund does beat the S&P, the advisory fee reaches .70% fairly quickly, but that's also the maximum management fee.....The fund's underlying trading strategy is not tax-efficient, so this fund doesn't make sense in a taxable account*.....But it might be worth a look in a non-taxable account.....Then again, you might just forget about beating the market.....Buy a pure index fund, and you'll never have to pay more than about .20% for everything.
* "A Fairer Mutual Fund," Lewis Braham, SmartMoney.com
- Van Kampen has stepped back from the trough, and dropped its proposal to increase the management fee for Emerging Growth.
- A FundAlarm ice-breaker, perfect for Holiday parties and other festive occasions:
Name two of the five fastest-growing mutual fund firms from July 1998 to July 1999
(We'll even tell you one of them: Janus)
| Answer: | 
|
- In July 1998, we ran this brief item about the Munder funds:
| Lee Munder is currently the majority owner of Munder Capital Management (which runs the
Munder fund family).....In July [1998], Lee Munder will sell most of his personal stake in the company to his current partner, Comerica, Inc., which will end up owning 88% of the company.....Comerica apparently wants to sell some shares back to employees of Munder
Capital, but when and how much are yet to be determined.....In the meantime, Munder managers have something to think about other than managing your money. |
|
The unrest that we saw on the horizon has, indeed, come to pass.....Lee Munder was replaced by the team of Paul Tobias and Gerry Seizert.....Seizert stepped down as co-CEO about three months ago, officially to concentrate on the investment side of the business.....In mid-October, Tobias also stepped down, and left the firm.....Comerica has named an interim CEO (not Seizert), and Comerica is now looking for a permanent replacement for Tobias.....Lee Munder has "returned" to "assist in the operations of the firm during the transition," and he has even agreed to remove his golf cleats before entering the boardroom.....There's still no explanation why Tobias left, although it's possible that he tried and failed to engineer a buyout by the firm's top management.....Munder has a history of losing fund managers, and the recent executive turnover can't be a good omen.
- The SoGen funds have been sold to the company that runs the First Eagle funds, and they will be renamed First Eagle SoGen.....It appears that Jean Marie Eveillard will stay on the job for at least five years.....Pimco is in merger talks with Allianz, a German insurance company.
- Billy Joel was the surprise lunchtime performer at the recent annual meeting of the Baron funds.....Joel sang "New York State of Mind," although some of his other songs were reportedly off-limits, including "Get It Right The First Time," "Worse Comes To Worst," and "Last Of The Big Time Spenders".....Why did Ron Baron invite the 50-ish Joel to perform?....."I try and make the business younger all the time".....For next year's meeting, Ron Baron is said to be considering one of the 60's girl groups, either the Ronettes or the Shirelles ("a-do-ron-ron-ron, a-do-ron-ron......").
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FundAlarm © Roy Weitz, 1999
|