Sentinel Mid Cap Value Fund changes subadviser, strategy and name

By Toni Weeks

San Diego, Jan. 13 - The Sentinel Mid Cap Value Fund said it has terminated its subadvisory agreement with Crow Point Partners, LLC and selected a new subadviser, investment strategy and fund name.

As previously reported, shareholders of the fund did not approve a proposal at an Oct. 24 meeting to approve a new investment sub-advisory agreement with interim subadviser Crow Point, whose contract expired Jan. 13.

According to a 497 filing with the Securities and Exchange Commission, Sentinel Asset Management, Inc. will serve as subadviser, and the fund's name will change to Sentinel Mid Cap II Fund. Montpelier, Vt.-based Sentinel also serves as the fund's investment adviser.

The fund's investment strategy has changed and will now normally invest at least 80% of its net assets in mid-capitalization companies, defined as companies that have, at the time of purchase, market capitalizations between $500 million and $25 billion.

The fund will invest in common stocks of companies that are attractively valued and of high quality and have superior business models, solid management teams and sustainable growth. Up to 25% of the fund's assets may be invested in securities within a single industry, and the fund will attempt to be well-balanced across major economic sectors, using the Standard & Poor's MidCap 400 Index as a sector-weighting guide.

Previously the fund used a different method to define mid-capitalization companies, aligning its portfolio within the range of the lowest market capitalization of a stock included in the S&P MidCap 400 Index or the Russell Midcap Index up to and including that of the largest company included in either index.

As of Feb. 28, 2011, this defined the mid-capitalization range for the fund as between $220.6 million and $25.8 billion. In addition, the fund focused on issuers with a solid risk/return profile whose securities were priced attractively and had potential to generate superior relative long-term returns. According to the fund's March 30, 2011 prospectus, the issuers were generally U.S. companies, although the fund did invest to a lesser extent in securities of non-U.S. companies.

Betsy Pecor will be the lead manager of the fund's portfolio management team. Charles C. Schwartz and Matthew McGeary will be co-managers. All are vice presidents with Sentinel.

The Mid Cap II Fund will generally have the same management fees as its predecessor, but Sentinel has entered into an agreement to waive fees as necessary to prevent the total operating expense ratio of the class A shares, on an annualized basis, from exceeding the total operating expense ratio of the class A shares of a different fund, the Sentinel Mid Cap Fund.

Under this agreement, and based on the fund's fiscal year 2010 operating expenses, no fees needed to be waived at this time to satisfy the agreement, but fees may be waived in the future until the agreement terminates on March 30, 2013.

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