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Changes are in Investment Objective, Investment Strategy, Portfolio Manager Team, Advisory Fee Rate and Expense Limitations of the Fund, and Resignation of Subadviser
The fund is changing focus from opportunistic ("event driven") value investing to intrinsic value investing, and adding an explicit requirement that 65% of its portfolio be invested in income-producing securities. As it migrates its portfolio, it expects to have a lot of turnover.
Managers (people) come and go, but I can't recall seeing a subadvisor (management company) resigning. Usually it's fired by the fund family running the fund. Here, the fund's long time (30+ years) managers, Harold Levy and David Cohen created the submanagement company that is "resigning". If they simply wanted to close up shop, First Eagle could have hired the remaining managers and not had to overhaul the fund. All in all, the "resignation" seems rather strange.
The in-house managers assigned by First Eagle have at best limited experience managing funds. Albertini is a manager of FEBAX, but he's the junior one of four, with just over a year's experience there. First Eagle describes Gupta as an associate manager of SGENX, but he doesn't appear in the fund's prospectus. It's a similar situation with Christian Heck who is described as an associate manger of SGOVX, but isn't in the fund's prospectus. In short, no lead management experience, and little experience at a level senior enough to even merit a mention in a prospectus.
High turnover, inexperienced management, virtually a new fund (new objective). Hard to find any reason to consider this fund.
Comments
Managers (people) come and go, but I can't recall seeing a subadvisor (management company) resigning. Usually it's fired by the fund family running the fund. Here, the fund's long time (30+ years) managers, Harold Levy and David Cohen created the submanagement company that is "resigning". If they simply wanted to close up shop, First Eagle could have hired the remaining managers and not had to overhaul the fund. All in all, the "resignation" seems rather strange.
The in-house managers assigned by First Eagle have at best limited experience managing funds. Albertini is a manager of FEBAX, but he's the junior one of four, with just over a year's experience there. First Eagle describes Gupta as an associate manager of SGENX, but he doesn't appear in the fund's prospectus. It's a similar situation with Christian Heck who is described as an associate manger of SGOVX, but isn't in the fund's prospectus. In short, no lead management experience, and little experience at a level senior enough to even merit a mention in a prospectus.
High turnover, inexperienced management, virtually a new fund (new objective). Hard to find any reason to consider this fund.