Fund Openings, Closings, Manager Moves: Munder Value Set to Cash Out

We knew value investing was on the skids, but we didn't know it was this bad.

(MUVAX)Munder Value will liquidate its assets on May 31, according to company officials and paperwork filed with the Securities and Exchange Commission Friday. The mid-cap value fund is already closed to new investors, but current shareholders can continue buying shares until April 14. If shareholders don't exchange their Value shares into another Munder fund by May 31, their shares will be redeemed in cash.

The move comes at a time when value funds are being lapped by their growth counterparts. Over the past year mid-cap growth funds beat their value peers 129% to just 14%, according to Lipper.

The fund isn't a standout. It trails its average peer over the past one- and three-year periods, according to Morningstar. Over the past three years, the fund's average annual return is just 5.8%, lagging the S&P 500 by more than 16 percentage points.

Schwab Readies Four Sector Funds

Charles Schwab (SCH), which runs primarily index funds, is branching out into sector funds.

The online broker is developing four sector funds it hopes will be available in May: Financial Services Focus, Health Care Focus, Technology Focus and Communications Focus.

The funds won't be tied to sector indices, but they will be on autopilot. Skipper Geraldine Hom, who manages five Schwab index funds, will run the portfolios following strict, sector-specific quantitative models. In each case, the various models screen the companies in each sector, ranking them according to which could have the best growth prospects. Although the prospectus clears Hom to rejigger weightings, those rankings will probably determine which stocks go into the portfolios and which get the biggest bets.

There are index sector funds, mostly in the tech category, but quantitative sector funds are a bit of a rarity. They fit with Schwab's approach to stock fund management, which focuses on passive strategies like index funds, quantitative funds or funds that invest in myriad other funds. That approach has won more than $100 billion in investment without alienating financial advisors and private money managers who are key Schwab clients.

Three of the funds are in hot categories. The average tech fund (184%), telecommunications fund (91%) and health care fund (70%) are well in the black over the past year, according to Lipper. Financial sector funds, on the other hand, are on the opposite extreme. Rising interest rates have weighed heavily on the sector. The average financial fund is down almost 14% over the past year.

The funds' minimum investments will be $5000, according to the paperwork filed with the Securities and Exchange Commission. Expenses aren't available yet, but they should be low, given the funds' passive strategies. The average fund in each of these sectors is pricey, with expenses ranging from 1.44% to 1.77%.

See Wednesday's Fund Openings, Closings, Manager Moves.

See Tuesday's Fund Openings, Closings, Manager Moves.

See Monday's Fund Openings, Closings, Manager Moves.

>To order reprints of this article, click here: Reprints