PRIMECAP, Dodge and Cox, Western Asset and Boston Partners are the latest winners of the Morningstar U.S. Fund Manager of the Year awards.
Using its own ranking system, the research firm recognized managers it considers leaders in domestic and international stocks, fixed income, alternatives and allocations. Morningstar honored managers for impressive performance, along with excellent long-term and risk-adjusted returns, and for being good stewards of fund shareholders' capital.
DOMESTIC EQUITY
Theo Kolokotrones, Joel Fried, Al Mordecai, Mohsin Ansari and James Marchetti received the Domestic-Stock Fund Manager of the Year award for the following funds:
- PRIMECAP Odyssey Aggressive Growth (POAGX)
- PRIMECAP Odyssey Growth (POGRX)
- PRIMECAP Odyssey Stock (POSKX)
- Vanguard Capital Opportunity (VHCOX)
- Vanguard PRIMECAP Core (VPCCX)
- Vanguard PRIMECAP (VPMCX)
All six funds received a Morningstar analyst rating of gold, the company’s highest medal rating, for generating returns greater than 13.5% and ranking in the 11th percentile or better in their respected categories.
Three of the managers have over $1 million invested in each of the six funds and two have between $100,000 and $500,000 invested. The company also received the award in 2003 for Vanguard PRIMECAP and Vanguard Capital Opportunity.
“The team has made a lot of money for many people at a low cost,” said Jon Hale, Morningstar’s director of manager research in North America. “All six funds place in the top 5% of their categories over the trailing 10-year period, and Vanguard PRIMECAP and Vanguard Capital Opportunity have 15-year records that respectively rank in the top 2% and top 1% of the large-growth category.”
INTERNATIONAL EQUITY
Charles Pohl and Diana Strandberg and the Dodge and Cox International Stock Policy Committee received the International-Stock Fund Manager of the Year award for Dodge and Cox International Stock (DODFX). The fund was recognized as a patient value strategy with low turnover.
Also with a gold analyst rating from Morningstar, the team was honored for putting up double-digit gains from long-time pharmaceutical holdings Novartis and Roche, and holding out on Hewlett-Packard stock, which also rose significantly this year.
“Dodge and Cox International Stock managed to end the year in the black with a 0.1% return versus the 3.9% loss of the MSCI ACWI ex-US Index and the category’s 5% decline,” Hale said.
FIXED INCOME
The Fixed-Income Fund Manager of the Year award went to Ken Leech, Carl Eichstaedt and Mark Lindbloom for Western Asset Core Bond (WACSX) and Western Asset Core Plus Bond (WAPSX). The two silver-rated funds also landed in the top decile of the Morningstar intermediate-term bond category, after posting significant losses in 2008.
Both funds gained more than 7.4% in 2014 beating out other contestants in the category. They were also acknowledged for their long-term interest rates and security selection in the non-agency mortgage and investment-grade credit sectors.
“Over the last few years, the team has deftly steered through rocky periods in the bond market,” Hale said. “The firm is supported by more than 40 analysts, and the team has an average of 20 years of experience.”
ALTERNATIVES
Robert T. Jones and Ali Motamed received the Alternatives Fund Manager of the Year award for Boston Partners Long/Short Equity (BPLSX and BPLEX). Given their low average net exposure of 34% and weekly beta for the year of only 0.12%, the fund surprisingly saw a 4.7% return in 2014.
“The management team isn’t afraid to make drastic moves to benefit fund shareholders,” Hale said. “For example, the fund added an array of small-cap stocks to the portfolio starting in 2008, leading to unrivaled success in 2009 and 2010. More recent performance has generated a large amount of alpha, with success from short holdings in 3D Systems, Netflix and Twitter.”
ALLOCATION
The Allocation Fund Manager of the Year award winner was Anne Lester and her team for the JPMorgan SmartRetirement Target-date Series (JSIIX, JSFIX, JTTIX, JNSIX, JSMIX, SRJIX, SMTIX, JSAIX, JTSIX and JFFIX). Each fund in the series returned more than 5% and with three-year annualized returns between 7% and 17%.
“In 2014, its funds, on average, ranked in the 8th percentile of their respective peer groups and outperformed their category averages by 2.2 percentage points,” Hale noted. “Since the series’ inception, the average rank of its funds has never fallen into the bottom third on a calendar-year basis.”
Lester has led the JPMorgan SmartRetirement team since the series’ inception in 2006.
