CHICAGO, Jan. 15, 2014—Morningstar, Inc. (NASDAQ: MORN), a leading provider of independent investment research, today announced its 2013 U.S. Fund Manager of the Year award winners live on CNBC’s “Power Lunch” program. The awards acknowledge managers who not only delivered impressive performance in 2013, but who have also shown excellent long-term risk-adjusted returns, and have been good stewards of fund shareholders’ capital.
To recognize outstanding fund managers each year, Morningstar selects leaders in five strategies: domestic stock, international stock, fixed income, alternatives, and allocation. The 2013 Fund Manager of the Year award winners in the United States are:
Domestic-Stock Fund Manager of the Year: Dennis Lynch and team, Morgan Stanley Focus Growth (AMOAX), Morgan Stanley Institutional Growth (MSEQX), Morgan Stanley Institutional Mid Cap Growth (MPEGX), and Morgan Stanley Institutional Small Company Growth (MSSGX)
Twenty-year industry veteran Dennis Lynch leads the 18-member U.S. Growth team that runs the four winning funds, all of which carry a Morningstar Analyst Rating™ of Gold. In 2013, all four funds returned more than 35.0 percent each, ranking them among the top echelons of their respective peer groups. The team follows a flexible approach in its focus on finding unique, market-leading companies, including astute pre-IPO investments. The team also conducts bigger-picture research on a variety of themes, innovations, and disruptive changes to help inform stock selection.
“The team operates in areas of the market that have seen the strongest runs this year. The degree of outperformance as well as patience with long-held and often controversial holdings, including Facebook and Groupon, make the team deserving of the 2013 award for the successful execution of the funds’ strategy,” Scott Burns, Morningstar’s director of global fund research, said. “Lynch and his team have also demonstrated shareholder-friendly practices, with a record of closing funds when assets under management warrant it—for example, both the Small Company Growth fund and the Mid Cap Growth fund have been closed in the past.”
International-Stock Fund Manager of the Year: David Samra and Daniel O'Keefe, Artisan International Value (ARTKX) and Artisan Global Value (ARTGX)
Morningstar nominated two Artisan manager teams for the category this year, and David Samra and Daniel O’Keefe took home the award in 2008. With a Gold Morningstar Analyst Rating, Artisan International Value ranked in the top percentile in Morningstar’s foreign large-blend category in 2013 with a 30.5 percent gain, beating the category benchmark by nearly 8 percentage points. Silver-rated Artisan Global Value also returned more than 30.0 percent last year, landing in the top quintile of Morningstar’s world-stock category in 2013.
“In addition to the outstanding performance last year, both funds have had strong performance since inception on an annualized basis, beating their respective categories by approximately 6 percentage points. The concentrated portfolios hover around 40 to 50 stocks each, and Samra and O’Keefe follow a disciplined strategy favoring financially sturdy firms trading at significant discounts to their estimate of value,” Burns said. “As good stewards of shareholder capital, they have closed Artisan International Value to new investors, and Samra and O'Keefe each have more than $1 million of their own money invested in both of their funds.”
Fixed-Income Fund Manager of the Year: Daniel J. Ivascyn and Alfred T. Murata, PIMCO Income (PIMIX)
Silver-rated PIMCO Income gained 4.8 percent in 2013, boosted by its core stake in non-agency mortgage-backed securities and smaller stakes in investment-grade and high-yield corporate securities. Ivascyn and Murata’s three- and five-year trailing returns have also been in the multi-sector bond category’s best quintile, and have kept the fund’s volatility below its average category peer’s.
“Ivascyn and Murata led the fund to a strong showing in 2013, and it proved resilient in the bear markets of 2008 and 2011 as well as during the summer sell-off of 2013. The team has also produced sizable yields and over-earned the fund’s set dividends without returning capital to shareholders,” Burns said. “The team focuses on deep fundamental analysis and benefits from PIMCO’s resources, large analytics team, strong data technology, and macro thinking.”
Allocation Fund Manager of the Year: Steven Romick, Mark Landecker, and Brian Selmo, FPA Crescent (FPACX)
FPA Crescent, rated Gold by Morningstar, returned 22.0 percent and placed in the top decile of the moderate allocation category in 2013. The experienced team is known for a competitive long-term record, savvy stock-picking, and producing equity-like returns with below-average volatility. Romick, Landecker, and Selmo don’t strictly follow a set allocation—they are bottom-up, value investors who roam across the capital structure in search of bargains and are not afraid to let cash build when they don’t find opportunities.
“Romick has led the fund since inception more than 20 years ago. Since 1993, the fund has turned a $10,000 investment into more than $89,000, and the fund’s 11.0 percent annualized gain from inception through December 2013 beats the category by more than 4 percentage points,” Burns said. “The managers also invest substantial sums in the fund—Romick, Landecker, and Selmo each have more than $1 million in this fund and the majority of their investable assets in FPA strategies.”
Alternatives Fund Manager of the Year: Brian Hurst, Yao Hua Ooi, and team, AQR Managed Futures Strategy I (AQMIX)
While managed futures funds have struggled over the past few years, the team at AQR Managed Futures Strategy has performed relatively well despite strong headwinds. In 2013, the fund gained 9.4 percent while the category lost approximately 1 percent. AQR Managed Futures Strategy has a Silver Analyst Rating and is the only positively rated managed futures fund that Morningstar covers.
“The fund takes a diversified approach to managed futures, offering exposure to equities, bonds, currencies, and commodities, along with diversification among its time-horizon bets, which has strongly contributed to the fund’s performance in recent years,” Burns said. “AQR’s team employs an intricate risk management process and a solid drawdown method, both of which contribute to our positive view of the fund’s process and the team’s stewardship of investor assets.”
For Morningstar’s article about the winners, please visit . For the complete list of past and current winners, go to .
Established in 1988, the Morningstar Fund Manager of the Year award recognizes portfolio managers who demonstrate excellent investment skill and the courage to differ from the consensus to benefit investors. To qualify for the award, managers’ funds must have not only posted impressive returns for the year, but the managers also must have a record of delivering outstanding long-term risk-adjusted performance and of aligning their interests with shareholders’. Nominated funds must be Morningstar Medalists—a fund that has garnered a Morningstar Analyst Rating of Gold, Silver, or Bronze. The Fund Manager of the Year award winners are chosen based on Morningstar’s proprietary research and in-depth qualitative evaluation by its fund analysts.
About Morningstar, Inc.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offers an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. Morningstar provides data on approximately 437,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 10 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its registered investment advisor subsidiaries and has approximately $176 billion in assets under advisement and management as of Sept. 30, 2013. The company has operations in 27 countries.
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