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Our Nominees for Domestic-Stock Manager of the Year

Will Bruce Berkowitz repeat, or will we have a new winner?

Russel Kinnel, 12/14/2010

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It's that time of year again--time to choose our Morningstar Fund Managers of the Year. Each year we recognize a standout mutual fund manager of the year for domestic stocks, international stocks, and fixed income.

We're not simply looking for who had the highest returns in the calendar year. We're seeking to acknowledge managers who have produced great long-term results for investors and who have been great stewards of investors' capital, as well as those who have had an exceptional calendar year. "Manager of the Year" makes a catchier name than "Great Steward Who Produced Strong Long-Term Results and Excellent Single-Year Returns and Showed the Courage of His or Her Convictions to Stick with His or Her Approach Through Thick-and-Thin Award."

Over the years, many illustrious names in the fund world have won, including Bill Gross, Peter Lynch, Marty Whitman, the Primecap team, and Hakan Castegren. Last year's winners were Bruce Berkowitz of Fairholme FAIRX, the team from American Funds EuroPacific Growth AEPGX, and the team from Loomis Sayles Bond LSBRX. To see the complete list of past winners, click here.

The award is intended as recognition of great service for shareholders, not necessarily as a recommendation for the future. The award is really more like the Hall of Fame, whereas our Analyst Picks would be more like the all-star team.

Today we're naming our five nominees for Domestic-Stock Manager of the Year. We'll name our international-stock nominees on Tuesday and our fixed-income nominees on Wednesday. We will announce the winners in the first week of January. To show you what we look at,  I've added performance attribution PDFs for all five funds. Normally, these reports are available only to subscribers of our Morningstar Direct institutional products, but I wanted to share them so that you can do your own deep dive. These reports show how each fund has done versus a benchmark over the past five years. Where did the managers add value, and where did they subtract it? Have a look and see for yourself.

We found a wealth of deserving candidates this year, but these are the five domestic-stock managers we found most deserving.

Bob Goldfarb and David Poppe--Sequoia SEQUX
Although many associate this fund most closely with founders Bill Ruane and Richard Cuniff, Bob Goldfarb has been onboard since 1971 and was named comanager in 1998. David Poppe joined the firm in 2000 and was named comanager in 2005. Go back through shareholder reports over the years, and you'll see frequent mention of both managers. The strategy here has evolved a bit over the years to placing greater emphasis on the quality of the business and its longevity, while slightly de-emphasizing the price being paid. In addition, Goldfarb and Poppe have reduced the fund's concentration as we illustrated in this recent FundInvestor article.

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