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Rating:Morningstar Feels Ambivalent About Wells Fargo Fund Mergers Not Rated 0.0 Email Routing List Email & Route  Print Print
Friday, May 20, 2011

Morningstar Feels Ambivalent About Wells Fargo Fund Mergers

News summary by MFWire's editors

Wells Fargo Funds Management [see profile] plans to merge away eight Advantage mutual funds next quarter. Yesterday the mutual fund arm of the giant bank revealed the eight planned mergers.

Classic Value, Core Equity, Disciplined Global Equity, Disciplined Value, Growth Opportunities, Mid Cap Growth, Small Cap Growth and VT Core Equity will all disappear, pending shareholder approval, and Emerging Growth (which is acquiring Small Cap Growth) will close to new investors. Wells will also shift management of Disciplined U.S. Core and two mutual fund component portfolios into the hands of Golden Capital Management, which the bank will soon own a 65 percent stake in.

In yesterday's "Fund Times" column, Morningstar mutual fund analyst Harry Milling ponders several of the mergers. In the case of Opportunity acquiring Core Equity, Morningstar expects costs to go down, but worries that the two funds invest in different worlds (mid-cap versus large cap, respectively). Morningstar praises Wells' decision to partially close Emerging Growth after it swallows Small Cap Growth, but notes that only $27.7 million of the combined $1.3 billion comes from the acquiring fund, Emerging Growth, meaning the merger might not drive down fees. 

Edited by: Neil Anderson, Managing Editor

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