Putnam New Century Growth
, the Boston fund shop's high-octane "New Economy" fund that just opened in January is set to close to new investors March 10.
When Putnam first offered the broker-sold fund to the public on Jan. 21 it set a $1 billion asset ceiling. Through last Friday the fund, up 12.4% since Jan. 1, had $802 billion. By the time the fund closes, it may actually top the $1 billion mark.
The fund, which focuses on small- and mid-caps, was actually launched on Feb. 18, 1998 and managed in incubation-only offered to Putnam and affiliate employees until its public launch. It boasts a 166% return in 1999, albeit with the significant benefits of a fixed asset base and a 65% weighting in technology stocks.
The average mid-cap growth fund doesn't have as much money as this fund has raised in little more than a month. The fund's gaudy returns certainly played a part in its launch's success, but so did brokers' confidence in co-managers Roland Gillis and Charles Swanberg co-manage the fund. The pair also run
Putnam Voyager II, whose 36.3% average annual return over the past five years beats 75% of its mid-cap growth competitors, according to
New Century Growth isn't necessarily cheap though. Among its various share classes, maximum front-end loads range from 3.5% to 5.75% and maximum back-end loads range from 1% to 5%. The different share classes annual expenses range from 1.25% to 2%. The average mid-cap growth fund's annual expenses are 1.63%, according to Morningstar.
New Sub-Advisers for Forward Equity, International Equity
Forward Equity and
International Equity have new sub-advisers as two industry heavyweights are being replaced.
Garzarelli Investment Management
Barclays Global Fund Advisors
on Equity and
Hansberger Global Advisors
takes International's reins from vaunted international specialist
Templeton Investment Council
, a unit of
. It's a quick hook as both funds are less than two years old.
The management change might not be a surprise on the young international fund, whose 23% return over the past year lags 80% of its peers, according to Morningstar. But Barclays has reason to be a bit miffed. Equity's 12.6% return over the past year is actually beating almost 60% of its large-cap blend peers.
Both funds will be actively managed, International Equity was passively managed under Barclays' short watch. Garzarelli will use a sector-focused research approach, developed by founder Elaine Garzarelli, on Equity and Hansberger will focus on growth stocks in managing International Equity.
Interestingly, the firm's founder, Tom Hansberger, is actually the former chairman and president of Templeton Worldwide, now a unit of Franklin-Templeton. Garzarelli is famous for predicting the market crash in October 1987.
ReliaStar Buys Lexington Funds
announced an agreement today to acquire
Lexington Global Asset Managers
, which has $3.6 billion in assets. ReliaStar plans to add Lexington's 13 mutual funds to its own
The deal, a stock and cash transaction valued at $47.5 million, will leave Pilgrim with $20 billion in assets once the two fund families are combined next quarter.
ReliaStar, a Minneapolis insurer, bought Pilgrim Capital last October (you may recall Pilgrim
retail funds as well). ReliaStar merged its own
funds into the Pilgrim family. The Lexington funds also will take on the Pilgrim label, according to a ReliaStar spokeswoman.
With the new name will probably come sales charges, too. Lexington funds are no-load, but Pilgrim's are sold through brokers and typically levy sales charges, or loads.
It is likely that Lexington's existing shareholders will still be able to buy shares without paying a load, but that the funds will add load share classes once the fund shops merge. This is how
handled its acquisition of Michael Price's popular no-load
funds. A Pilgrim spokesman didn't return a call for comment. Given the Lexington funds' modest assets -- many have less than $100 million -- it might make sense to add loads rather than market them separately.
ReliaStar says it struck the deal to bolster its international money-management capabilities, but Pilgrim already has several global and international funds with solid records, including
International Small Cap Growth,
International Value and
Worldwide Growth, each of which beat at least 70% of its peers over the past three years, according to
The combination will probably follow the standard industry blueprint where similar funds are combined, with the one with the best track record surviving.
"In any merger of fund complexes, there's a product line rationalization that follows," says Andrew Guillette, a consultant at Boston fund-researcher
Pilgrim Small Cap Growth has a better record than
Lexington Small Cap
Pilgrim Worldwide Growth is a better performer than
Lexington Corporate Leaders.
Lexington's top-performing funds last year were
Troika Russia and
Worldwide Emerging Markets, which were up 160% and 113%, respectively.
Federated Funds on Sale
put four of its broker-sold growth funds on sale for March, offering them with no load.
Through March 31, you can buy class A shares of
Large Cap Growth and
International Small Company without paying the maximum 5.5% sales charge.
You also can exchange assets among the four funds without paying a load, but you'll pay a 2% back-end sales charge on shares sold within 30 months.
Each fund is a solid performer vs. its peers. Last year, the $125 billion fund company took in $1.2 billion more than it lost to redemptions, according to Boston fund consultant
. That seems like a modest inflow given the firm's size, but about half of all fund complexes were in net outflows last year.
Preparing for 2001
Now that the much ballyhooed Y2K crisis that wasn't is past us,
HomeState Year 2000 is getting with the times.
Shareholders approved a name change and broadened investment scope. From now on, the fund will be
HomeState Select Technology
and look at tech companies beyond those involved in year 2000 preparation.
Given the fund's performance, it's almost surprising that shareholders tinkered with the fund at all. Over the past year, co-managers Kenneth Mertz II and Steven Russell are up more than 332%, ranking fourth out of 82 other tech funds, according to
The fund's ticker, HSYTX, won't change.
Openings, Closings, Manager Moves.