BlackRock’s Rice to Stop Co-Managing Five Energy Mutual Funds
Rice will be stepping down as co-manager of BlackRock Energy & Resources Portfolio (SSGRX) and four other funds, said Bobbie Collins, a spokeswoman for the New York-based firm, which is the world’s largest asset manager with $3.68 trillion. She declined to provide more details.
Rice has been the lead manager for the $950 million BlackRock Energy & Resources Portfolio since it was created in 1990. He’s also one of the founders of Rice Energy, a company with a subsidiary that has a joint venture with one of the mutual fund’s top holdings, Alpha Natural Resources Inc. (ANR) The fund raised its holding of Alpha Natural Resources since 2010, the Wall Street Journal reported June 1. Morningstar Inc. (MORN) placed the rating of the fund under review earlier this month, citing a potential conflict of interest.
He “could easily be subjected to future conflicts of interest,” analyst Rob Wherry wrote in a research note dated June 6. “Stewardship issues are overshadowing this fund’s merits,” he wrote.
The fund lost 19 percent this year, trailing 99 percent of peers, according to data compiled by Bloomberg. Over the past five years, the fund has declined 4.7 percent on average annually, trailing 64 percent of peers. Alpha Natural Resources represented 4.9 percent of the fund’s assets, making it the third-largest holding as of April 30, Morningstar data show.
BlackRock acquired Rice’s former employer, Boston-based State Street Research and Management Co., in 2005 and renamed the fund.
Rice holds a bachelor’s degree from Bates College in Lewiston, Maine, and an MBA from New York University.
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