• / Free eNewsletters & Magazine
  • / My Account

Related Content

  1. Videos
  2. Articles
  1. Practical Strategies for Today's Bond Market

    The outlook for bonds is just as cloudy as ever, but Morningstar's Miriam Sjoblom and Marta Norton offer helpful tips for setting the right expectations and creating a game plan in today's challenging bond market.

  2. Bond -Fund Investors Walking Gingerly

    First-quarter flows into many bond - fund categories were tepid compared with their equity counterparts, with improving economic conditions creating a Treasury sell-off.

  3. Where Bond -Fund Skippers Are Sailing

    A number of core bond - fund managers have moved away from Treasuries and toward opportunities in emerging markets and mortgage-backed securities.

  4. Bogle: We Need to Fix the Bond Index

    The benchmark index doesn't reflect the true allocations of U.S. bond investors, and the industry needs to look again at corporate- bond index funds or rework the current index, says Vanguard founder Jack Bogle.

Growth With High Quality

The managers of Mar Vista Strategic Growth talk as much about capital preservation as they do about making money.

Tom Lauricella, 12/02/2016

In every issue, Undiscovered Manager profiles a manager on the Morningstar Manager Prospects list, which is compiled by Morningstar’s manager research group.

For growth-stock pickers, the managers of Mar Vista Strategic Growth MVSGX sure spend a lot of time talking about protecting shareholder capital.

The investment process behind the Mar Vista fund, which has outperformed roughly three fourths of its peers since its launch five years ago and was added to the Morningstar Prospects list of up-and-coming strategies earlier this year, revolves around high-quality stocks, wide-moat businesses, and deep dives into valuations.

But the Mar Vista team doesn’t stop there. The team calculates a margin of safety on every name in the portfolio. And there’s an assigned “devil’s advocate” to argue against any stock the team is considering buying. All this supports a sentiment investors will hear repeatedly from the Mar Vista team: Capital preservation is just as important as making money.

For Silas Myers and Brian Massey, two of the fund’s managers, this approach was in part forged by what they saw firsthand during the Internet stock bubble collapse beginning in 2000.

At the time, Massey and Myers were analysts at Roxbury Capital Management where the Mar Vista Strategic Growth strategy originated. In the 1990s, Roxbury was known as a valuation-conscious growth-stock manager. But just as technology stocks were nearing their peak and performance-chasing was rife in the fund industry, Massey and Myers watched as the Roxbury fund managers turned away from their more conservative approach. The Roxbury managers began populating the portfolios with expensive, momentum stocks only to inflict huge losses on shareholders and leave the firm with a tarnished reputation when the bubble popped.

“Capital preservation is equally as important as appreciation,” Massey says. “We had a front-row seat in 2000–2002.”

Myers and Massey began managing the Strategic Growth strategy in 2004 while still at Roxbury. Today, along with co-managers Joshua Honeycutt and Jeffrey Prestine, they are owners of Los Angeles-based Mar Vista, which carries on the revitalized Roxbury strategy.

Tom Lauricella is the editor of Morningstar Direct.

Upcoming Events
Conferences
Webinars

©2014 Morningstar Advisor. All right reserved.