Who would you pick as your favorite for Manager of the Year?
Morningstar's fund analysts cover 2,000 mutual funds. Their full analyst reports, including Stewardship Grades, are available in Morningstar Principia Mutual Funds Advanced and Morningstar Advisor Workstation Office Edition.
Snow is on the ground and bowl games will soon be on the air. That can mean only one thing: It's time to nominate candidates for Morningstar Domestic-Stock Fund Manager of the Year.
Today, I'll reveal the five finalists for our award. (The winner will be announced on Jan. 3 on CNBC and Morningstar.com.)
But first, let's review our criteria. We look for managers who have made a lot of money for a lot of people over a long period of time. We also want managers who had a good calendar year. In addition, we look for managers who have blazed a trail with original research and who stick to their strategies through thick and thin. We also look for managers who are good stewards. That means they put shareholders' interests first rather than try to extract every last penny from shareholders.
So, let's take a look at our five finalists which I've listed in alphabetical order.
D'Alonzo and the analysts at Friess Associates practice a surprisingly effective brand of momentum investing that is based on human intelligence rather than speedy computer programs. They spend tons of time calling, e-mailing, and visiting stores, customers, and company management in order to get the very latest information on sales trends so that they can buy the companies most likely to produce upside earnings surprises. D'Alonzo tempers that with valuation discipline but the funds are still pretty aggressive. (Blue is a large-cap fund whereas Brandywine is all-cap.) This year Brandywine Blue is up 24% and Brandywine is up 23%, and they boast strong trailing returns as well.
D'Alonzo and team also score highly for stewardship. D'Alonzo invests heavily in the funds he runs, and he writes insightful shareholder letters.
Talk about making a lot of money for a lot of people. Will Danoff is having a great year with more than $90 billion in assets combined in the two funds. In fact, he's had many great years with a lot of investors on board. Since Danoff took the lead at Contrafund in October 1990 through Dec. 10, 2007, he has produced annualized returns of 16.5% versus 12.4% for the Wilshire 5000. Ten years ago, the fund had $31 billion in assets, and it has returned an annualized 10.9% since compared with 6.2% for the S&P 500. Danoff seems to always be one step ahead of the market. He has made brilliant moves into and out of technology, energy, and precious-metals stocks. This year, Google