January 24, 2018

Morningstar Announces 2017 U.S. Fund Manager of the Year Award Winners

Fund managers recognized for standout performance over the past year and impressive long-term records

CHICAGO, Jan. 24, 2018 /PRNewswire/ -- Morningstar, Inc. (NASDAQ: MORN), a leading provider of independent investment research, today announced its 2017 U.S. Fund Manager of the Year award winners. The awards, to be featured on CNBC's "Power Lunch" program today, acknowledge managers who delivered impressive performance in 2017, have generated excellent long-term risk-adjusted returns, and have been good stewards of fund shareholders' capital. To recognize outstanding fund managers, Morningstar selects leaders in four categories: domestic stock, international stock, fixed income, and allocation/alternatives.

"In 2017, we saw a powerful equity rally around the world, while returns on the bond side were muted. In both areas, our Fund Managers of the Year used their proven investment approaches to come out on top," said Laura Pavlenko Lutton, Morningstar's director of manager research, North America. "We also recognize these managers for their strong investment teams, impressive long-term records, and a clear dedication to making money for investors."

The 2017 Fund Manager of the Year award winners in the United States are: 

Domestic-Stock Fund Manager of the Year: Steven Wymer, Fidelity Growth Company (FDGRX)
Steven Wymer has used a unique and long-term oriented investing approach at Fidelity Growth Company since 1997. Wymer's ability to spot promising growth companies early on has fueled the fund's impressive short- and long-term results, as evidenced by Nvidia, a top contributor in 2017 that he first purchased in 2008. Wymer's willingness to bet with conviction on his top ideas and his skill picking technology and biotechnology stocks have provided an enduring edge for the fund over various market cycles, leading to results that have trounced its Russell 3000 Growth Index during his tenure. Below-average fees and a willingness to close the fund to new investors, as it has been since 2006, help earn the fund a Morningstar Analyst Rating of Silver and Positive scores for all five pillars of the Analyst Rating—Process, Performance, People, Parent, and Price.

"Wymer's success is a result of his time-tested investing approach, utilizing Fidelity's research team and executing a thoughtful strategy that has played well in a growth-fueled market," Lutton said. "Since Wymer's start, the fund has beaten nearly all of its large-growth peers. Even in tough environments for active large-growth managers, it's consistently outpaced its benchmark."

International-Stock Fund Manager of the Year: Sarah Ketterer, Harry Hartford, and team; Causeway International Value (CIVIX)
Lead managers Sarah Ketterer and Harry Hartford, along with six additional comanagers, employ a disciplined value approach that has delivered excellent long-term results. The team uses a combination of fundamental and quantitative analyses to find firms that are facing operational, but not financial, distress and have superior long-term, risk-adjusted prospects. The result is a relatively low-turnover portfolio of 50 to 60 stocks that often look unlike the holdings in the typical foreign large-value Morningstar Category peer, as well as that of the MSCI EAFE Index. The fund, which earns a Morningstar Analyst Rating of Gold, posted strong results in 2017, primarily driven by solid picks in the eurozone. For example, the team built a sizeable stake in German automaker Volkswagen amid its U.S. emissions scandal, and the stock rose more than 40 percent in 2017 as investors grew more comfortable with its turnaround prospects.

"This value-oriented fund's 2017 showing is even more impressive considering the growth-led market environment that has persisted," Lutton said. "The fund also possesses an excellent long-term track record, delivering an 8.3 percent annualized gain since its 2001 inception."

Fixed-Income Fund Manager of the Year: Michael Collins, Robert Tipp, Richard Piccirillo, and Gregory Peters; Prudential Total Return Bond (PDBZX)
This team has guided Prudential Total Return Bond to consistently strong performance without taking on outsized risks. Michael Collins, Robert Tipp, Richard Piccirillo, and Gregory Peters execute a thorough, straightforward process with a historical focus on corporate bonds and securitized assets. The fund's outperformance has come from a variety of sources including security selection, sector allocation, duration, and yield-curve calls. The team is backed by large teams of analysts dedicated to fundamental research as well as proprietary analytics, risk management, and attribution. The fund earns a Morningstar Analyst Rating of Silver, with Positive ratings across all five pillars.

"This team has shown it can weather the storm when it comes to market volatility, and the managers have the flexibility to adjust the fund when necessary," said Lutton. "Their collaborative approach shows in the fund's underlying methodology and overall process. With a methodical approach, strong risk controls, and robust security valuation, we expect that this team will continue to do well."

Allocation/Alternatives Fund Manager of the Year: David Giroux, T. Rowe Price Capital Appreciation (PRWCX)
David Giroux has produced an admirable long- and short-term track record at T. Rowe Price Capital Appreciation. The fund has beaten its category average in each calendar year since 2008 and has handily outperformed its benchmark over the long haul. The fund, which closed to new investors in 2014, has continued to outperform as its assets have grown due to appreciation. Giroux typically invests about 60 percent in stocks and 40 percent in a mix of bonds, convertibles, leveraged loans, and cash, though he shifts the fund's exposures based on bottom-up and top-down considerations. The fund has a Gold Analyst Rating, scores Positive for all five pillars, and Giroux previously won Morningstar Fund Manager of the Year in 2012.

"Strong healthcare picks such as Abbott Laboratories and UnitedHealth Group and a bias toward corporate bonds in the fixed-income sleeve contributed to the fund's success in 2017," said Lutton. "As valuations have trended higher, Giroux has maintained his disciplined, risk-aware approach. He has demonstrated keen asset-allocation skills, shifting the portfolio opportunistically."

For Morningstar's article about the winners, please click here. Live updates from the award announcement beginning today at 12 p.m. CT will be available on Twitter at http://www.twitter.com/MorningstarInc or through the hashtag, #MstarAwards.

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. The Fund Manager of the Year award winners are chosen based on research and in-depth qualitative evaluation by Morningstar's Manager Research Group. 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'. Managers' funds must currently have a Morningstar Analyst Rating™ of Gold or Silver. A list of current Morningstar Medalists is available here to Morningstar.com Premium members. For more information about Morningstar Awards, visit https://go.morningstar.com/Morningstar-Awards

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, retirement plan providers and sponsors, and institutional investors in the private capital markets. Morningstar provides data and research insights on a wide range of investment offerings, including managed investment products, publicly listed companies, private capital markets, and real-time global market data. Morningstar also offers investment management services through its investment advisory subsidiaries, with more than $220 billion in assets under advisement and management as of Sept. 30, 2017. The company has operations in 27 countries.

Morningstar's Manager Research Group consists of various wholly owned subsidiaries of Morningstar, Inc. including, but not limited to, Morningstar Research Services LLC. Morningstar's Manager Research Group produces various ratings including the Morningstar Analyst Rating for funds and the Morningstar Quantitative Rating for funds. The Analyst Rating is derived from a qualitative assessment process performed by a manager research analyst, whereas the Morningstar Quantitative Rating uses a machine-learning model based on the decision-making processes of Morningstar's analysts, their past ratings decisions, and the data used to support those decisions. In both cases, the ratings are forward-looking assessments and include assumptions of future events, which may or may not occur or may differ significantly from what was assumed. The Analyst Ratings and Quantitative Ratings are statements of opinions, subject to change, are not to be considered as guarantees, and should not be used as the sole basis for investment decisions. This press release is for informational purposes only; references to securities should not be considered an offer or solicitation to buy or sell the securities.

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