BOSTON -- Fidelity Investments removed Arieh Coll from his position as manager of the now $1.054 billion Fidelity Trend Fund. The fund ended 1997 with $1.428 billion under management.
The aggressive growth fund badly trailed the 6% year-to-date return, as of Sept. 30, of its benchmark -- the S&P 500 -- returning -15.5% for the period.
The fund didn't stack up much better against the -0.21% return of peer funds in the Lipper Growth Average year-to-date ended Sept. 30.
Mr. Coll was removed because the "performance of the fund was not where we wanted it to be," company spokesman Scott Beyerl said. Mr. Coll is now a small-cap equity analyst, part of Fidelity's fairly new small-cap team, Mr. Beyerl said. Small-cap stocks are more Mr. Coll's specialty, Mr. Beyerl said.
Nick C. Thakore will replace Mr. Coll as Trend's manager. He comes off an 18-month stint managing utility mutual funds and a telecommunications sector fund for Fidelity.
Peter Saperstone succeeded Mr. Thakore as manager of the Fidelity Utilities Fund, Fidelity Advisor Utilities Fund and the Fidelity Select Telecommunications Portfolio. Mr. Saperstone has been managing smaller sector funds at Fidelity.
Buck survey shows lower salaries for all
NEW YORK -- Buck Consultants' annual salary survey found that mutual fund chief executive officers' total compensation dropped 10.6% in 1998 to an average of $918,000, compared with $1.027 million in 1997.
Lesser mortals at many fund companies also suffered this year. Due to lower annual bonuses, the heads of fixed-income and equity investment groups, as well as senior equity portfolio managers, experienced declines in total compensation. Fixed-income heads saw their compensation drop 13.4% to an average of $565,500. Equity head honchos watched their total compensation drop 11% to an average of $423,200. Senior equity portfolio managers saw their compensation slide 30.1% to an average of $281,100.
Buck's survey also pointed to a growing use of bonus and incentive plans below the executive level at many mutual fund families. Almost four out of 10 mutual fund companies (38.7%) use bonus plans for non-exempt hourly workers. Bonus plans for salaried non-executives are in place at 45.2% of surveyed companies.
Buck's survey was based on interviews with 40 fund complexes.
General equities outperform counterparts
NEW YORK -- For the fourth straight quarter, general equity funds offered as part of variable annuity insurance investments performed slightly better in the third quarter than did their open-ended mutual fund counterparts.
The average general equity fund used in a variable annuity declined 14.5% in the third quarter, compared to a 15.0% drop for open-ended general equity mutual funds, according to data from Lipper Analytical Services Inc. Double-digit declines were reported by 12 out of the 19 investment objective categories used by defined contribution plans.
Lipper's data found that fixed-income investment objective categories used in variable annuity programs posted positive returns in the third quarter, with the exception of high current yield funds, which were down -6.9% and general bond funds which were down -0.1%.
Vanguard offers new financial planning tool
MALVERN, Pa. -- The Vanguard Group of Investment Cos. made a new financial planning software tool available to investors free on its Web site (www.vanguard.com).
The Vanguard Navigator Plus program is available to 401(k) plan sponsors and their participants and can be customized to reflect an individual company's plan features and investment options.
The Vanguard Navigator Plus program helps individual investors develop appropriate asset allocations, using Vanguard mutual funds, to meet savings goals. The program also contains an element of estate planning to help investors devise basic plans for preserving assets and minimizing taxation.
The program's suggestions initially default to Vanguard index funds, but individual investors can opt to augment their portfolios with actively managed funds.
* Neuberger & Berman Management Inc., New York, unveiled the Millennium Fund, which invests in U.S. growth companies with market capitalizations between $100 million and $1.5 billion. Stocks are selected using a disciplined screen with specific growth, quality and valuation criteria. Jennifer Silver and Michael Malouf are co-managers of the fund.
* Southeastern Asset Management, Memphis, reopened the $3 billion Longleaf Partners Fund in early October. The fund was closed Sept. 15, 1995, when co-manager Mason Hawkins said it was difficult to put new cash flow to work. The investment climate now, however, allows the fully invested fund to use new cash flow to reduce the price-to-value ratio and improve returns, Mr. Hawkins said. Staley Cates is the fund's other co-manager. A new fund, The Longleaf Partners International Fund, opened Oct. 26 and is managed by Mr. Hawkins, Mr. Cates and Andrew McDermott. Employees of Southeastern Asset Management invested $27 million of their money to seed the fund.
* Lord, Abbett & Co., New York, introduced a new mutual fund, the Lord Abbett Growth Opportunities Fund, which will invest in companies with market capitalizations between $1 billion and $6 billion that have histories of earnings and revenue growth and experienced management teams. Stephen McGruder is the leader of the fund's investment team.
* Third Avenue Funds, New York, announced that the Third Avenue Value Fund will reopen to new investors Oct. 15. The $1.5 billion fund was closed July 15. Manager Martin J. Whitman said the fund had been closed to allow him to put a $434 million cash position to work. Down market conditions during the three-month closure period were conducive to the fund's value approach, and Mr. Whitman was able to buy the stock of many of the companies he was interested in from a quality perspective at very good prices. The fund's cash position is now at about $209 million.
* Acorn Investment Trust, Chicago, created two new mutual funds, both managed by Wanger Asset Management LP, Chicago. The funds are the Acorn Twenty and the Acorn Foreign Forty funds. Both look for companies with solid growth potential, financial strength and fundamental value. Both will invest in mid- to large-size companies with market capitalizations between $1 billion and $10 billion.
The Acorn Twenty Fund will invest in 20 to 25 U.S. companies. John H. Park and Mark H. Yost are the fund's co-managers.
Marcel P. Houtzager and Leah J. Zell are co-managers of the Acorn Foreign Forty Fund, which will invest in 40 to 60 companies in major international markets.
The fund will accept subscriptions until Nov. 20 and begin operations on Nov. 23.
* Federated Investors Inc., Pittsburgh, launched its 12th international fund -- the Federated Global Financial Service Fund. It is only the second U.S. mutual fund to concentrate on the global financial services sector. The fund will invest in as many as five regions at any time -- the U.S., Asia, Europe, Latin America and Eastern Europe.
Marc Halperin was brought on to manage the fund, with Drew Collins and Charles Ritter. Mr. Halperin joined Federated on Sept. 21, coming from UOB Asset Management in Singapore, where he managed a global financial services fund and a European equity fund. Mr. Collins will continue to manage the Federated International Equity and International Growth funds and parts of Federated's other nine international funds. Mr. Ritter will continue to head research and management for Federated's Managed Series Trust asset allocation funds and separate accounts.
* Westcore Funds, Denver, introduced a new value equity fund, the Westcore Mid-Cap Opportunity Fund. Manager Christianna Wood is applying the company's "Fallen Angels" and "Rising Stars" strategies to identify value stocks of companies that may have made mistakes that the market has punished but that are poised to recover, and companies with unrecognized potential to rise to the top of their industries.
* American Express Retirement Services, Minneapolis, added three collective index funds to the investment options offered within its retirement plan services program. American Express will invest the funds in indexed mutual funds managed by Bankers Trust Co. The new funds are the American Express Trust Small Cap index, which tracks the Russell 2000 index; the American Express Trust International index, which tracks the EAFE index; and the American Express Trust Bond index, which tracks the Lehman Aggregate Bond index. American Express offers five indexed collective funds to defined contribution plan sponsors.
* John Hancock Funds, Boston, renamed the John Hancock Sovereign Bond Fund the John Hancock Bond Fund. The John Hancock Global Rx Fund was also renamed the John Hancock Global Health Sciences Fund. The funds' investment objectives are unchanged; the names are intended to more fully reflect the funds' investment strategies.
Christine Williamson can be reached at [email protected]