Morningstar announced its 2010 Fund Managers of the Year Wednesday. The awards are based not just on performance in 2010 by over the long term, as well as on fiduciary responsibility for investors’ capital.
Bob Goldfarb and David Poppe of Sequoia, managers of the Sequoia Fund, were named Domestic Stock Fund Manager of the Year.
Brent Lynn, manager of the Janus Overseas Fund, is the International Stock Fund Manager of the Year.
And Michael Hasenstab of the Templeton Global Bond Fund is the Fixed Income Manager of the Year.
“Each year, we dig deep into our coverage universe to identify those managers who led top-performing funds or the past year and have also exhibited exemplary stewardship and stellar long-term results,” said Karen Dolan, director of mutual fund analysis at Morningstar. “While the market continued to rebound in 2010, these managers posted exceptional gains—enough to overcome the difficult market environment of the past few years that has much of the competition still reeling.”
Morningstar said that the Sequoia Fund holds stocks for the long-term, seeking out companies with “top-quality management, rock-solid balance sheets and the ability to compound capital.”
Dolan noted: “Sequoia is one of the most deliberate and methodical funds out there in regards to changes in its portfolio, shown by its consistently low turnover. The fund’s 2010 gains were not the result of savvy tactical moves or one knockout pick, but emerged from well-researched stocks that have long held a spot in the portfolio.”
The fund gained 19.5% in 2010, compared to its benchmark’s 14% return. Over the past 15 years, its annualized return is 9.7%.
Morningstar said that Lynn of the Janus Overseas Fund has been with the fund for 10 years and became lead manager in 2003. As the portfolio manager of the fund, he has delivered a 19% annualized gain. In 2010, the fund delivered 19.3%, beating its benchmark by four percentage points.
“Lynn’s strategy is more aggressive than the typical core international offerings that focus mostly on developed markets, but it has proven resilient,” Dolan said. “His keen focus on growth and stock-specific research has led him to favor prospects in emerging markets, especially India, Brazil and China. Most remarkable, though, is just how well Lynn has managed those risks.”
The Templeton Global Bond Fund has a 10-year annualized return of 11.7%, nearly double that of its category. In 2010, it returned 12.7%, placing it in the top quartile of the world bond category. This is the eighth time in the past 10 calendar years since Hasenstab joined the fund that it has placed in the top quartile.
“By shying away from overleveraged developed economies, the fund’s profile differs from traditional benchmarks and much of the competition,” Dolan said. “Hasenstab instead focuses on the bonds and currencies of countries with low debt levels and positive growth prospects. He has proved to be one of the few managers who can execute a global bond strategy this well and this consistently.”