Video Reports

Embed this video

Copy Code

Link to this video

Get LinkEmbedLicenseRecommend (-)Print
Bookmark and Share

By Christine Benz and Michael Herbst | 01-14-2014 11:00 AM

Fund Manager of the Year: Morningstar's Selection Process

Our awards recognize managers who had a great year but also have consistently delivered for investors over the long haul, says Morningstar director of active fund research Michael Herbst.

Christine Benz: Hi, I'm Christine Benz for Morningstar.

Morningstar announces its Fund Managers of the Year each January. Here to provide a peek into the selection process is Michael Herbst, director of active funds research for Morningstar.

Michael, thank you so much for being here.

Michael Herbst: Thank you for having me.

Benz: Michael, everyone anxiously awaits these award winners. Let's talk about the selection process. It's Fund Manager of the Year, but you are not just looking at the single year's performance, right?

Herbst: That's correct. For the awards, we do want to recognize managers who we think benefited investors by executing their strategies successfully over the past year. But we're also looking for managers that have done that over the long haul.

All of our nominees and all of our winners are Morningstar Medalists, which means they've been assigned Morningstar Analyst Ratings of Bronze, Silver, or Gold. It's worth noting that that group of Morningstar Medalists constitutes just over 10% of the funds available for sale in the U.S. So, we are already picking from an elite bunch.

Benz: You head up our active funds research. You are intimately involved in this process of nominating and selecting fund managers. Let's talk about how it works. When do you start talking about who might the Fund Managers of the Year be, and then what sort of process do you use to vet them and finally arrive at the winners?

Herbst: We start actually talking about nominees and who is doing well probably in September and October. This is something that our analysts are particularly interested in, so the conversations pick up from there.

The formal process, the way it works is, we solicit nominations from across the fund research team. Anybody can select a manager for nomination. We do have asset class experts that head up the nominations in each area. So those experts will vet the nominations. Then we reconvene as a group, and we all get in the same room at the same time and review the nominations and conduct voting that way. Every analyst has a vote: one person one vote.

Read Full Transcript

{0}-{1} of {2} Comments
{0}-{1} of {2} Comment
  • This post has been reported.
  • Comment removed for violation of Terms of Use ({0})
    Please create a username to comment on this article