Piloted by the redoubtable Dave Williams since 1992, Excelsior Value & Restructuring has been one of those rare funds that you could just put away and hold.

In 2007, a dismal year for most value funds, Excelsior returned 10%. In the decade through January 31, 2008, the fund (symbol UMBIX) returned an annualized 11%, an impressive six percentage points per year ahead of Standard & Poor's 500-stock index.

Alas, it looks as though we'll soon have to remove Excelsior from the Kiplinger 25, the list of our favorite no-load funds. That's because it looks as though the fund -- and other members of the Excelsior family -- will begin levying sales charges in late March.

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The switch is the result of the acquisition of Excelsior's adviser, U.S. Trust, by Bank of America. The Excelsior funds will be branded as Columbia funds.

If you don't currently hold shares in Value & Restructuring, you might consider investing before the March switch. Assuming that shareholders approve all of the changes, existing Excelsior customers will be able to add to their holdings without paying a load after the change in status.

Based on the fee structure of other Columbia funds, most new investors will have to pay a 5.75% front-end sales charge for the class A shares and higher annual fees for the B and C class shares after the conversions take effect.

The change from no-load to load should have no effect on Value & Restructuring's management. Williams says the recent turbulence in the stock market has provided him with a chance to pick up some higher quality and faster growing companies: "I've been able to improve quality without paying up for it."

He's picked up shares of technology stocks such as IBM (IBM), Nokia (NOK) and Harris Corp. (HRS), in part because he thinks the switch in investor sentiment toward growth stocks and away from value stocks, which began in 2007, could take several years to play out.

Financial stocks have been crushed, so he is picking up some of these, too. "It's a no-brainer," says Williams, who owns shares of Morgan Stanley (MS) and Lehman Brothers (LEH).

He adds: "I don't care about next quarter's earnings. I think at least five years out when I buy a stock, since it takes that long for some restructurings to evolve." Williams holds his stocks for eight to ten years on average.

He's also looking abroad for growth. For instance, he holds Agco Corp (AG), an agricultural-machinery maker, mostly for its exposure to Brazil's booming farm sector. And down in Brazil, he owns oil giant Petrobras (PBR), airline GOL Linhas Areas Inteligentes (GOL) and an airplane manufacturer Embraer (ERJ), whose formal name is Empresa Brasileira de Aeronutica.

Williams is pulling back a bit from stocks of midsize companies. He likes to buy midcaps that are ripe for merger or acquisition by, for example, private-equity outfits. But this strategy isn't working well today, because the leveraged financing market that underpins leveraged buyouts is in acute distress. "In the last six months, we've had three companies whose deals fell apart," Williams says.

One of the refreshing things about Williams is the simplicity of his approach to stockpicking. Elaborate spreadsheets are not for him. "Numbers are important but are not my nitty gritty," he says.

Instead, he says, he looks for companies with above average business prospects and below-average valuations and a catalyst, such as restructuring, that will release value. And he likes to meet company bosses to hear their business plans. Most times, he says, the case to invest in a company can be laid out on a single piece of paper.

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POSTED BY: Brett (February 18, 2008 06:19 PM)
I can't imagine why investors pay such high loads. Yes, performance is great. But paying such a high load just cuts deep into the potential earnings you might have. How do these funds stay in business??? Readers should think carefully about funds charging loads, as index funds may outperform them in the long run (when you account for the large savings in transaction costs and expense fees). Beating the market consistently, as this fund seems to have done, is great. But when you account for the load, do you still come out ahead? If you can buy some now and get in while it's no load, great. If not, save shop around for other no load funds or even other consistent performers with lower loads...

POSTED BY: steve hill (February 19, 2008 02:29 PM)
The fund that holds shares for an average of 8 years needs time for many of (its) investments to mature. A high load chases away short termers. It probably keeps money in the fund during trying times (like now) whereas with no load in or out -- people would be fleeing. I imagine that chraging high load is another way of 'closing' the fund. I've owned UMBIX since 2004 and as long as Dave Williams is managing, I'm staying.

POSTED BY: LARRY (February 19, 2008 05:14 PM)
...I just sold all my shares after owning the fund for years, too many changes going on....

POSTED BY: Sam Hale (February 19, 2008 06:02 PM)
FFRHX - Your comment, "The fund has been highly consistent ...", is quite a stretch. Have you looked at the price over the past six-months? It's consistent all right, but in the wrong direction.

POSTED BY: LARRY (February 20, 2008 02:49 PM)
I see Kiplinger reported last month that the manager of this fund was actually retiring at the end of 2009. Good luck with Columbia Funds and their high fees and marketing practices.

POSTED BY: JIM (February 21, 2008 02:43 PM)
I was going to dump my shares when I received notice of the merger, but I echo Steve's sentiments - as long as Dave Williams stays, I'll stay. Am interested in Larry's comment re Williams' possible pending retirement...have to watch that.

POSTED BY: Robert (February 26, 2008 11:04 AM)
Please let us know when Dave Williams actually (is) leaving the fund. That is when I will unload. Also do you know how much is the fund fee after the switch?

POSTED BY: micky (March 04, 2008 02:23 PM)
Funny because I sold my shares of UMBIX a few months ago because it simply wasn't performing. Who knows what the new managment and name will bring?

POSTED BY: james (March 05, 2008 07:19 PM)
I've owned this fund for about a decade, and working in the business as a trader, its been decently outperforming. If the manager stays, and the fee hikes don't effect you, stay on.... he has a knack. Like all funds, keep tabs on the performance relative to its peers.

POSTED BY: Mark J Acton (May 12, 2008 04:33 PM)
I just bought into the Columbia value & Restruct Z. Fund UMBIX. Buy the Z class UMBIX and there is no sales charge, No Load . Morningstar 5 star rated " Analyst Pick". Kiplinger 25..keep this fund !

POSTED BY: L. feldman (October 02, 2008 04:47 PM)
Where has all the brilliant management been this week. Each day the S&P posts a three digit gain (while) shares in the fund decline precipitously

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