American Funds, Berkowitz and Loomis Sayles Gain Top Manager Kudos
Reported by Patricia Kelly
In light of the rapid turnaround and sky-high returns many mutual funds delivered in 2009, Morningstar certainly had its share of fund managers to choose from for its annual 'Fund Manager of the Year' award. On Tuesday, Bruce Berkowitz, the team at American Funds EuroPacific Growth Fund, and the team at Loomis Sayles Bond Fund took top honors.
The award, which has been given out to fund managers in the fixed income, domestic stock, and international stock asset classes since 1988, is based on fund performance and returns, the manager's long-term track record and being “good stewards of fund shareholder capital.”
“Stock and bond markets posted spectacular gains in 2009, but investors remain subdued with portfolios still marred by the global financial crisis that began in 2007,” stated Karen Dolan, director of Morningstar's mutual fund analysis. “The winning managers deftly steered their funds throughout the tumultuous environment and emerged strong in 2009's rally. These managers have posted competitive long-term results for their shareholders and demonstrated exceptional stewardship of capital.”
This is just the latest props for Berkowitz –- the star manager of the Fairholme Fund (FAIRX) -– who was named the top domestic-stock manager. The award arrives on the heels of Berkowitz cinching gurufocus.com's 'Investment Guru' award for 2009. Berkowitz's fund was up 39 percent in 2009, helping him to beat out fellow Morningstar nominees Charlie Dreifus of Royce Special Equity Investment, Steve Romick of FPA Crescent, Joel Tillinghast of Fidelity Low-Priced Stock, and Yacktman's Don Yacktman.
In the international stock arena, the team at American Funds' EuroPacific Growth Fund (AEPGX) took home top honors in '09 based on the fund's 39 percent gain for the year, ten years after winning the award in 1999. The team of eight includes Stephen Bepler, Mark Denning, Nicholas Grace, Carl Kawaja, Jonathan Knowles, Sung Lee, Robert Lovelace, and Jesper Lyckeus.
The American Funds team overtook nominees David Herro of Oakmark International Small Cap I, Dennis Stattman of BlackRock Global Allocation A, and Jean-Marie Eveillard of First Eagle Global.
The management team at Loomis Sayles Bond Fund (LSBRX), with Dan Fuss, Kathleen Gaffney, Mathew Eagan, and Elaine Stokes at the helm, saw a 37 percent gain in '09 and has annualized returns of 8.3 percent since 1997. Morningstar cited the personal investment the funds' managers have as well, noting that lead manager Dan Fuss has over $1 million personally invested in the bond fund.
Loomis Sayles outshined several high-profile nominees who have been in the news of late, including: Pimco's Total Return star Bill Gross, who now oversees the largest fund in the US; Jeffrey Gundlach of TCW Total Return Bond I, who recently launched DoubleLine funds after being outed from TCW; and lastly, Christine Thompson of Fidelity Municipal Income.
Company Press Release
CHICAGO, Jan. 5, 2010—Morningstar, Inc. (NASDAQ: MORN), a leading provider of independent investment research, today announced the winners of its 2009 Fund Manager of the Year award. The three awards acknowledge those managers who delivered excellent performance in 2009 and over the long term and have been good stewards of fund shareholder capital. To recognize the best fund managers each year, Morningstar selects leaders in three asset classes—domestic stock, international stock, and fixed income. The 2009 Fund Manager of the Year winners are:
*Domestic-Stock Fund Manager of the Year:
Bruce Berkowitz, Fairholme (FAIRX)
*International-Stock Fund Manager of the Year:
*The team at American Funds EuroPacific Growth (AEPGX)
*Fixed-Income Fund Manager of the Year:
*The team at Loomis Sayles Bond (LSBRX)
“Stock and bond markets posted spectacular gains in 2009, but investors remain subdued with portfolios still marred by the global financial crisis that began in 2007,” said Karen Dolan, director of mutual fund analysis for Morningstar. “The winning managers deftly steered their funds throughout the tumultuous environment and emerged strong in 2009`s rally. These managers have posted competitive long-term results for their shareholders and demonstrated exceptional stewardship of capital.”
*Domestic-Stock Fund Manager of the Year: Bruce Berkowitz, Fairholme (FAIRX)
*Bruce Berkowitz was last nominated for the Morningstar award in 2008 and clinches the 2009 award for posting yet another superior year, placing him in the top quartile of the fund`s peer group for nine of the fund`s 10-year existence. Berkowitz revamped the portfolio in 2008 by selling high-flying energy stocks and picking up out-of-favor pharmaceutical and defense companies. The fund gained 39 percent in 2009, placing it in the top 9 percent of its large-blend category peer group. In 2008, Fairholme lost approximately 30 percent while the average domestic-stock fund lost 39 percent. Since its inception in December 1999, the fund has more than tripled in value, while the market has lost nearly 10 percent cumulatively over the same period.
Dolan said, `Bruce Berkowitz continues to impress in good markets and in bad. While 2009 is a great achievement for the fund, it is all the more impressive when you consider the attractive returns he`s put up year after year in a variety of environments.`
*International-Stock Fund Manager of the Year: The team at American Funds EuroPacific Growth (AEPGX)
*The team at American Funds EuroPacific Growth took home this award in 1999 and wins again for 2009 with a one-year gain of 39 percent, ahead of 85 percent of its peers. The eight-person management team includes Stephen Bepler, Mark Denning, Nicholas Grace, Carl Kawaja, Jonathan Knowles, Sung Lee, Robert Lovelace, and Jesper Lyckeus. It made timely decisions—sticking with strong emerging-markets companies when they were spiraling downward in 2008 as well as buying out-of-favor financials and putting a sizeable cash position to work in 2009. The fund’s top-quartile performance in the foreign large-blend category in seven of the past 10 calendar years is due to the managers` consistently successful stock picks.
The fund is also shareholder-friendly with one of the longest tenured teams around and a 0.80 percent expense ratio, which is much lower than the average of 1.52 percent for international-stock funds.
“This fund`s losses in 2008 were painful at 40.5 percent, in what was an even worse year for most international-stock funds. It managed to lose less than most without giving up ground on the upside. Any weakness in this team`s research would`ve been exposed in the past two years as its large emerging-markets position was put to the test—facing headwinds in 2008 and rallying in 2009. But, the managers’ picks were rock solid,” Dolan said. “The firm has been investing overseas much longer than many of its peers, starting its research in the 1950s. This depth of experience has benefited shareholders over the long term.”
*Fixed-Income Fund Manager of the Year: The team at Loomis Sayles Bond (LSBRX)
*The management team of Dan Fuss, Kathleen Gaffney, Matthew Eagan, and Elaine Stokes steered Loomis Sayles Bond to a remarkable 37 percent return for 2009, and claims this year’s fixed-income award. The team’s bold go-anywhere approach, which typically results in hefty exposure to junk corporate bonds and non-dollar currencies, has seen its share of ups and downs in the short run. The fund’s boldness has delivered outstanding results over the long haul, though, as reflected in the fund’s 8.3 percent annualized returns since its inception in early 1997. Fuss, who has led the fund since 1991, also won the award in this category in 1995.
The fund is a Morningstar Analyst Pick for the team’s investing acumen and substantial personal investment alongside shareholders. Regulatory filings show that all of the managers have more than $100,000 invested in the fund, and Fuss has more than $1 million in the fund.
“The disciplined and experienced team at Loomis Sayles Bond has served shareholders well over the past year and over the long haul. The team has just been through one of the most difficult periods for its deep-value approach, but it took calculated risks and stuck with its strategy in 2008’s difficult market, which paid off in spades in 2009,” Dolan said. “The team also steered the fund to the right foreign currencies in 2009, a skill that has proved to be one of its strong suits over time.”
Established in 1988, the Morningstar Fund Manager of the Year award recognizes portfolio managers who demonstrate excellent investment skill and the courage to differ from the consensus to benefit investors. To qualify for the award, managers’ funds must have not only posted impressive returns for the year, but the managers also must have a record of delivering outstanding long-term performance and of aligning their interests with shareholders’. The Fund Manager of the Year award winners are chosen based on Morningstar’s proprietary research and in-depth evaluation by its fund analysts.
All year-end figures cited in this press release are preliminary and subject to change.
For Morningstar’s article about the winners, go to:
For the complete list of past and current winners, go to:
*About Morningstar, Inc.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offers an extensive line of Internet, software, and print-based products and services for individuals, financial advisors, and institutions. Morningstar provides data on more than 325,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 4 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. The company has operations in 20 countries and minority ownership positions in companies based in two other countries.