One Year Is Not Enough
These outperformers in 2014 warrant a wait-and-see attitude.
The Morningstar FundInvestor 500 presently includes 55 funds with Morningstar Analyst Ratings of Neutral, an indication that the analysts who cover them lack confidence in their prospects for outperformance over the course of a full market cycle. That does not preclude such funds from having an impressive year here or there, however. In 2014, 11 Neutral-rated Morningstar 500 funds earned spots in the top quintile of their respective peer groups. The three funds highlighted below-- Fidelity Magellan (FMAGX), T. Rowe Price International Stock (PRITX), and PIMCO Global Multi-Asset (PGMDX)--were among these Neutral-rated overachievers. Despite the strong showing and other positive attributes, each still has something to prove before meriting a place among the Morningstar 500's Medalists.
Jeffrey Feingold is the latest manager tapped to help this fund reclaim its glory days. Under former manager Peter Lynch, the fund had an epic run from mid-1977 to mid-1990. Magellan's 29% annualized gain in the Lynch era nearly doubled the S&P 500's. Following his departure, the fund struggled to beat its benchmark consistently and went through four managers prior to Feingold's mid-September 2011 start date.
Alec Lucas has a position in the following securities mentioned above: PCRIX, PRRIX. Find out about Morningstar’s editorial policies.