Four fund managers have been dubbed leaders in their field by Morningstar Inc.
Morningstar announced its 2016 Fund Manager of the Year award winners for domestic stocks, international stocks, fixed income, and allocation/alternatives Wednesday. The award in each category acknowledges the managers who delivered impressive performance in 2016, generated excellent long-term risk-adjusted returns, and were good stewards of fund shareholders’ capital.
Morningstar analysts looked across all managed products that receive a Morningstar Analyst Rating to identify the industry’s best managers.
“Active managers faced many challenges in 2016 including market headwinds and heavy redemptions as investors moved their assets to passive investments,” said Laura Pavlenko Lutton, Morningstar’s director of manager research, North America. “In the face of those trends, these managers stood out for remaining steadfast in their investing approach, which paid off for investors last year.
“These Fund Managers of the Year also deserve recognition for the skill they’ve demonstrated, amassing impressive long-term records while demonstrating a commitment to shareholders.”
David Wallack of T. Rowe Price Mid-Cap Value received the award for Domestic-Stock Fund Manager of the Year. Morningstar says he has successfully run T. Rowe Price Mid-Cap Value using solid research, patience and a risk-conscious process since 2000. Below-average fees and a willingness to close the fund to new investors, (it’s been closed since 2010), helped earn the fund a Morningstar analyst rating of gold, Morningstar’s highest medal rating.
David Herro of Oakmark International was named International-Stock Fund Manager of the Year. Herro has been this fund’s lead manager since its 1992 inception and was Morningstar’s 2006 International-Stock Fund Manager of the Year and International-Stock Fund Manager of the Decade for 2000 to 2009. Oakmark International has a gold analyst rating.
Herro’s approach is to invest in everything from growth stocks that have dipped to deep value plays. Most notable is his investment in shares of United Kingdom-based miner Glencore, which fell sharply in 2015 amid fear it wouldn’t be able to service its debt. Herro recognized the opportunity and invested heavily in the company in the latter half of that year. Partly because of the rising prices of primary metals, the stock rose 204 percent in 2016. Oakmark International reopened to new investors in July 2016 following significant outflows after closing in 2013, says Morningstar.
Ford O’Neil and his team of Fidelity Total Bond have been named Fixed-Income Fund Manager of the Year. O’Neil and his team of portfolio managers have provided consistent leadership and strong risk-adjusted results for investors in 2016 and in years past. Instead of betting on interest-rate trends, they aim to perform in the top half of their intermediate-term bond category over rolling 36-month periods by making sector, yield curve and individual security selections, says Morningstar.
The brains behind the Dodge & Cox Balanced strategy were named Allocation/Alternatives Fund Manager of the Year. Morningstar says the deep and experienced management team at Dodge & Cox Balanced has a sound process, a rock-bottom expense ratio of 0.53 percent, and a strong long-term performance record. The fund is led by Dodge & Cox’s equity and fixed-income investment policy committees, whose members have been with the firm for an average of more than 20 years. The fund brings together a low-turnover, value-oriented equity portfolio and a distinctive fixed-income portfolio with an emphasis on corporate bonds.