Who's got the best mutual fund family of 2012?
Putnam Investment Management took the honors in Barron's/Lipper Fund Family Ranking, rising like a phoenix from the ashes (namely, rank 57) of 2011. Putnam was followed by Pimco and The Hartford Mutual Funds.
Putnam scored terribly in 2011 given "critical, poor calls" on bets like Bank of America and the decision to avoid fixed income. But strong performance in equities and taxable bonds in 2012 helped it recover its groove in a wham-bang way.
Chief executive officer and president Bob Reynolds is "very bullish on stocks," insisting that bonds are risky given low interest rates, reports Barron's/Lipper. He also stresses that fundamental security picking "has a bright future," according to Barron's/Lipper.
"We would rather be an equity holder than a bond holder," Reynolds told Barron's/Lipper. "The upside is much, much greater. I don't see how interest rates can get much lower at this point, which puts tremendous risk in the bond market."
Meanwhile, bond funds boosted Putnam, whose CEO and co-chief investment officer Mohamed El-Erian notes the "recent surge in risk assets."
"What really worked was buying more volatile, riskier stocks; and the market became more tolerant of risk as the year went on," Paul Quinsee, chief investment officer of the U.S. equity division at JPMorgan Asset Management, told Barron's/Lipper. JPMorgan scored rank four, while Goldman Sachs nabbed rank five to round out the top five performers of 2012. Both JPMorgan and Goldman scored within the bottom half in 2011.
In 2011, Delaware Management ranked first based on its focus on fixed income, followed by Vanguard Group and Neuberger Berman Management, in that order.
Barron's/Lipper ranking takes into account the one-year performance of all equity and fixed-income funds, assessing performance in five categories at specific weightings: U.S. equity funds at 35%, world equity at 16%, mixed-asset (balanced funds) at 17%, taxable bonds at 27%, and tax-exempt bonds at 4%.
