Fund Openings, Closings, Manager Moves: Stowers to Power Tech Fund

American Century plans to launch a new tech fund in May, led by James Stowers.
Author:
Publish date:

American Century

plans to put one of its top managers, James Stowers, in charge of a new technology and telecommunications fund slated to launch in May.

Stowers oversees the firm's growth-stock managers and has been on the management team of American Century's $42 billion

(TWCUX) - Get Report

Ultra since the fund's 1981 inception. The large-cap

growth fund has a solid track record, beating its average peer over the past one-, three-, five- and 10-year periods, according to

Morningstar

. Over the past 10 years, the fund's annualized return is 25.1%, which beats 93% of its peers.

Ultra is overweighted in telecom and tech stocks, so Stowers is used to picking stocks in these sectors. At the end of January, seven of the fund's top-10 holdings were in one of the two sectors. Just under 40% of the fund was invested in tech at the end of January.

The preliminary prospectus for the

Technology

fund that was filed with the

Securities and Exchange Commission

gives it the most leeway possible. The paperwork says the fund can invest in U.S. or foreign stocks of any size. The fund can also use a broad definition of a tech stock: a company that derives 50% of its business from the sector.

Fee and expense information isn't included, but the fund will have both direct and adviser share classes. If it follows the pricing structure of other American Century funds, neither share class will have a front- or back-end sales charge, but adviser shares will charge an annual 0.5%

12b-1 marketing fee to pay an adviser for selling the fund.

Fund companies are launching tech and telecom funds left and right as investors stuff billions into the funds. Last year, investors bought $33 billion worth of tech fund shares. The previous record was just $4.4 billion, according to Boston fund consultant

Financial Research

.

Vanguard Fund Fights Inflation

Looks like

Alan Greenspan isn't the only one with inflation on his mind.

Vanguard

hopes to launch an

Inflation-Protected Securities

bond fund on May 31.

The fund will invest primarily in inflation-indexed bonds, like TIPS (for Treasury inflation-protected securities). Like regular bonds, they pay a fixed interest rate, but the principal investment is adjusted to match inflation. Since investors are assured of getting at least the face value of these bonds, they are seen as a good hedge against inflation risk. The U.S. Treasury has offered them since 1996.

John Hollyer and Ken Volpert will run the fund, with Ian MacKinnon, Vanguard's chief of fixed income, overseeing their work. Volpert is listed as the manager of three index bond funds. Hollyer isn't listed as a manager on any retail Vanguard fund, but the prospectus says he's been managing investments since 1989.

The fund's expenses aren't disclosed, but Vanguard's fixed-income funds' annual expense ratios range from 0.10% to 0.30%, well below the average taxable bond fund's expenses of 1.12%, according to Morningstar.

The fund could give investors a safe port in a stormy market. Last year, rising rates sent most bond funds under water, but

(PRRIX) - Get Report

PIMCO Real Return Bond, an institutional fund that focuses on inflation-protected securities, posted a 5.7% return.

See Monday's

Fund Openings, Closings, Manager Moves.