Morningstar named its 2008 fund managers of the year, although it was a stretch to call any of the recipients genuine "winners."

Fund performance was so dismal last year, for example, that the domestic stock manager of the year, Charlie Dreifus of the Royce Special Equity Fund, lost nearly 20%.

"Why give out awards when everyone's year-end statement is swimming in red ink?" Morningstar stated in announcing the awards. "Because limiting losses was difficult to do, yet incredibly valuable."
Morningstar also noted its fund manager awards are meant to recognize long-term performance and strong stewardship, not just a single year's results.

In naming Dreifus domestic manager of the year, Morningstar cited his dedication to buying "only stocks that trade at a steep discount to his intrinsic-value estimates." He also demands high returns on invested capital and clean accounting.

"Thus, when accounting scandals hit and people lose faith in companies' risk controls, Royce Special Equity is a good place to be," Morningstar said.

The fund lost 19.5% in 2008, which was 1,400 basis points better than the category average.
The fixed-income managers of the year were Bob Rodriquez and Thomas H. Atteberry of the FPA New Income Fund, who were credited with predicting the mortgage meltdown.

"From his perch in Los Angeles, Rodriguez had a good view of the insane housing speculation and the crazy mortgages behind them," Morningstar said.

The fund steered clear of risk before the meltdown hit in 2007, which cost it returns in the short run, but led to a gain of 4.3% in 2008. That's 920 basis points better than the average intermediate-term bond fund.
"That's a remarkable feat in the bond world, where winners and losers are usually separated by 30 basis points," Morningstar said.

The international managers of the year were David Samra and Dan O'Keefe of the Artisan International Value Fund. They did an "outstanding job applying a deep-value strategy overseas," Morningstar said, adding that investment discipline limited their losses to 30.1% in 2008. "Although that's not pretty, it's a far sight better than the 47% loss posted by the average foreign small/mid-value fund and the 43% loss at MSCI EAFE," Morningstar said.