Readers' Picks For Fund Managers of the Year
Many agree with Morningstar's picks--with a few notable exceptions.
One of the interesting things about Morningstar's annual list of Fund Manager of the Year nominees is what the list often says not just about the nominees' skills but about market conditions that year.
Take 2014, for example. It was a year in which U.S. large-cap stocks continued to perform well even as volatility increased, while U.S. small caps and foreign stocks languished. On the fixed-income side, interest rates continued their downward march, surprising some rate watchers while rewarding those who continued holding longer-term bonds.
On Wednesday, Morningstar will announce its Fund Managers of the Year in the domestic-stock, international-stock, fixed-income, allocation, and alternative fund-category groups. But in the meantime, we asked Morningstar readers on our Mutual Funds discussion board for their nominees in the domestic-stock and fixed-income categories. Many agreed with the picks on our nomination list, while others made nominations of their own. You can read the full discussion here.
Domestic-Stock Fund Picks
Among the nominees for domestic-stock fund manager of the year, Todd Ahlsten and Ben Allen of Parnassus Core Equity (PRBLX) were favorites.
"This fund normally performs very well during down markets, minimizing losses, but for 2014, an up-market year, it placed in the top 11th percentile of the large-blend category, beating [the category average] by 3.5 [points]," wrote glebbb. "It also bested the S&P 500 by 0.8 points--not too bad for a defense-oriented large-cap [fund]. ... I'm used to [the fund] lagging during up years, so 2014 was a pleasant surprise, but I hope it maintains its defensive properties during our future sure-to-come corrections and crashes."
McMontana also had good words for Parnassus Core Equity but sounded a note of caution about the fund.
"I've been watching with a little bit of dismay as the assets under management shoots up," McMontana wrote. "They say no problem, but a significant stake in mid- and small-[cap stocks] has been a constant feature of 'P-Core' since forever, and many a good fund has had to change its ways and push up its average market cap as the [money] comes in. Maybe they'll be able to keep up the good work, but I don't see how a Morningstar award is going to be good for this fund at this time, or for the current investors."
Reader rogern thinksa different nominee is the obvious choice for the award.
"It would be hard not to pick the Primecap management team for domestic-stock manager of the year," he wrote. "I have significant long-term positions in three of the six funds they manage and I am well pleased with all three, for 2014 and their long-term performance."
A third nominee, T. Rowe Price Mid-Cap Growth (RPMGX) also garnered praise.
Invester1007 said he or she has owned the fund since 1997, adding, "It has been my best fund. [Manager Brian Berghuis] has done a great job. Low-fee, low-volatility, consistent above-average returns with low turnover for less income-tax costs."
One fund not nominated by our analysts but suggested by reader DBSMichigan was Meridian Growth Legacy (MERDX), a small-growth fund that carries a Morningstar Analyst Rating of Bronze. The fund is managed by Chad Meade and Brian Schaub.
"They left Janus to take over the fund [in September 2013], got the portfolio revamped, and finished 2014 in the 4th percentile vs. peers in their category," DBSMichigan wrote. "I think that's quite a feat and portends good things for their performance in 2015, when increased volatility will favor accomplished traders over steady-Eddies."
Fixed-Income Fund Picks
On the fixed-income side, readers' comments focused on just a few names--including two of the biggest in the industry.
Reader dtconroe argued that Jeffrey Gundlach, manager of DoubleLine Total Return Bond (DBLTX), merits consideration. (Morningstar has given the fund a Not Ratable designation due to insufficient information about its portfolio and personnel.) The fund gained 6.7% in 2014, beating its average peer by 1.6 percentage points and landing it in the top 10th percentile of intermediate-term bond funds.
Another reader, muniadvocate, suggested that the Fixed-Income Fund Manager of the Year award go to the central player in the year's biggest fund-industry drama.
"Most consequential manager has to be Bill Gross," the commenter said. "He left PIMCO, causing, directly or indirectly, a significant loss of assets under management, then joined the Janus family of funds, where he has had a large impact. Some money followed him and some found new homes altogether. I realize the nomination might be controversial as some managers outperformed Bill, but in terms of being truly consequential to the overall fixed-income market, he should be considered."
Then there was capecod, who threw his support behind Dan Ivascyn, who was named chief investment officer of PIMCO following Gross' departure and who also received an honorable mention as comanager of PIMCO Income (PONAX).
Some comments have been edited for clarity and brevity.
Adam Zoll does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.