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
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
. 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
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
Vanguard Fund Fights Inflation
Alan Greenspan isn't the only one with inflation on his mind.
hopes to launch an
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
PIMCO Real Return Bond, an institutional fund that focuses on inflation-protected securities, posted a 5.7% return.
Fund Openings, Closings, Manager Moves.