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Our Large-Value Ratings From Top to Bottom

Here's a look at some of the funds we've rated so far in this category.

Russel Kinnel, 12/19/2011

One of the best things about our new Morningstar Analyst Ratings is that we fill in the gaps between a category's best and worst funds so that you can understand exactly where we think a fund falls. We started by rating our former Fund Analyst Picks and the largest funds, skewing the ratings to the recommended side, but over time more funds will land in Negative and Neutral. I have pulled together our ratings in the large-value category. I've chosen a section from each fund's analysis to illustrate key insights that drove the rating. Our confidence in managers and strategies is a big driver of the ratings. The Neutral funds feature managers who either lack a record or have a record that is mediocre.


T. Rowe Price Value TRVLX
People section written by Katie Reichart
New manager Mark Finn has access to T. Rowe's well-respected analyst team, and the fund is overseen on a high level by an investment advisory committee. Finn's experience across the capital structure, accounting background, and time as an industrials analyst should prove valuable for seeking out undervalued securities. However, he has no prior management experience, and it's still too early in his tenure to give him a complete vote of confidence.

Columbia Value & Restructuring UMBIX 
People section written by David Kathman
David Williams has been this fund's lead manager since its 1992 inception, compiling one of the best long-term records in the large-value category, but he announced in early 2011 that he will retire at the end of 2012 after 20 years with the fund. At that time he will hand over the reins to Nick Smith and Guy Pope, who were both named comanagers here in early 2009, in apparent anticipation of Williams' eventual departure ... It's possible that these new managers could excel once they take over, but at this point we can't be as confident about them as we would about Williams, whose idiosyncratic stock-picking skill has been crucial to the fund's success.

Vanguard Windsor VWNDX 
People section written by Dan Culloton
This fund has two subadvisors: one solid, the other suspect. Fortunately, the stronger subadvisor, Wellington Management Company, controls the bulk of the portfolio.

Jim Mordy, a longtime member of the eight-person team that has managed this fund since its 1958 inception, has been lead manager since 2008. Mordy has worked with three of his predecessors, including John Neff, who ran the fund from 1964 to 1995. Mordy, who had between $500,000 and $1 million invested here as of the most recent regulatory disclosure, is steeped in the fund's value style and has strong support.

The AllianceBernstein team that runs nearly 30% of this fund has been in flux in recent years as has the firm in general. Joe Paul and Greg Powell, who are currently listed as managers on this fund, are the fifth and sixth from AllianceBernstein assigned to this fund. The firm has always used a team approach, but there have been a number of changes to that team since AllianceBernstein replaced its CEO and former listed manager on this fund Lewis Sanders in 2009 (Sanders' new firm, which includes another former manager of this fund, now runs part of Vanguard Windsor II VWNFX). That's a lot of change, even though Paul and Powell have been with AllianceBernstein and analyzing stocks or managing value portfolios since 1987 and 1997, respectively.

Russel Kinnel is Morningstar's director of mutual fund research. He is also the editor of Morningstar FundInvestor, a monthly newsletter dedicated to helping investors pick great mutual funds, build winning portfolios, and monitor their funds for greater gains. (Click here for a free issue). Mr. Kinnel would like to hear from readers, but no financial-planning questions, please. Follow Russel on Twitter: @russkinnel.

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