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By Russel Kinnel and Christine Benz | 03-07-2014 01:00 PM

How Manager Changes Affected 3 Medalist Funds

The specifics surrounding a manager transition can impact our certainty of a fund's propensity to outperform in the future--and hence our Analyst Rating.

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

Quality of management plays a huge role in Morningstar's Fund Analyst Rating system. Joining me to discuss three recent management changes is Russ Kinnel, director of fund research for Morningstar.

Russ, thank you so much for being here.

Russ Kinnel: Good to be here.

Benz: Russ, let's start with a fund that we have long covered and long liked quite a bit. Selected American recently announced that longtime manager Ken Feinberg was going to be stepping down. Let's talk about that change and how you, as head of the ratings committee, view that change and how it's affected the fund's rating.

Kinnel: It was bit of a surprise, because Ken Feinberg was a longtime co-manager. I saw him as more or less an equal with Chris Davis. So, to see him step down was a bit of a surprise. The fund has had mediocre performance in the last five or six years, stronger performance over the long term.

When we thought about it, we thought ,well there are some good analysts there, but it's still a blow to lose a key member of the team. So we lowered the fund from Silver to Bronze.

Benz: Who is taking over for Feinberg in that co-manager role?

Kinnel: Danton Goei who is a longtime analyst--really their top-performing analyst--who has contributed lot of good ideas. He was promoted to replace Feinberg on the fund. It seems like a logical promotion, but again it's a loss to see Feinberg go.

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