Janus and Hartford Top Fund Company Rankings for U.S. Stocks

It's time to close the books on 2007, but first let's take a look at how the fund companies have been doing across the board. I like to roll up fund companies' returns and asset-weight them to see how fund companies and their clients are really doing. It might seem obvious who would be leading, but the process always yields some surprises.

We have taken the 20 largest domestic equity fund shops, looked at the three-year percentile performance rank for their stock funds, and then weighted those percentile ranks based on where the asset base stood three years ago. That final wrinkle is designed to give us a handle on how the typical fundholder fared because a lot more people owned Janus Fund than Janus Venture. I go back three years for asset size because if I used today's asset base, appreciation and fund flows would naturally slant it to a more favorable result than would be accurate.

So, let's take a look at the rankings. Remember that for percentile rankings 1 is the best and 100 is the worst. (See the table for all the details.)

Top 20 Domestic-Equity Fund Families by Asset-Weighted Three-Year Rank
	3-year Asset-Weighted Rank (Dec. 2004)	3-year Asset-Weighted Rank (Dec. 2007)	Change in Rank
Janus	32.54	19.72	12.82
Hartford Mutual Funds	34.06	20.80	13.26
Davis Funds	11.71	25.71	-14.00
American Funds	35.42	32.89	2.53
Columbia	45.69	34.26	11.43
Dodge & Cox	1.00	35.00	-34.00
Fidelity Investments	49.77	38.74	11.03
T. Rowe Price	27.15	41.15	-14.00
MFS	66.90	41.28	25.62
Vanguard	29.58	42.83	-13.25
BlackRock	57.58	49.29	8.29
AIM Investments	65.17	51.60	13.57
ING	67.73	52.66	15.07
OppenheimerFunds	44.31	53.96	-9.65
Franklin Templeton Investments	49.17	56.73	-7.56
Lord Abbett	45.85	57.45	-11.60
Van Kampen	64.73	58.19	6.54
American Century Investments	31.01	64.44	-33.43
John Hancock	75.24	74.23	1.01
Putnam	60.13	80.29	-20.16
Asset-weighted ranks exclude institutional shares.

Janus clocked in with an average percentile rank of about top 20% for the three years ended 2007. That's outstanding.  Janus Contrarian (JSVAX),  Janus Twenty , and  Janus Orion (JORNX) posted returns that were in the top 2% of their category for the three years, and many other Janus funds had a strong three years, including  Janus Fund , which was run by David Corkins for about two of those three years. That's a remarkable turnaround considering the firm's bear market woes. The bad news is that Corkins and Janus Twenty manager Scott Schoelzel have resigned, as have some other managers at Janus. (Click here for the details.) Thus, the firm will have a pretty tough time matching that performance.

Hartford clocked in next with an average of 21%. Wellington Asset Management has done a great job running most of Hartford's stock funds. Leading the way is Saul Pannell of  Hartford Capital Appreciation (ITHAX). The fund has taken in huge sums of money, but Pannell and company keep delivering.  Hartford Growth Opportunities (HGOAX) and Hartford Small Company (IHSAX) have been big winners, too.

Davis Funds was next, thanks to strong performance at  Davis New York Venture (NYVTX) and  Selected American (SLADX). They clearly aren't resting on their laurels. After a tough year due to big financials weightings, they are putting more chips on those bets with big investments in  Merrill Lynch  and  MBIA Incorporated  (MBI).

American Funds averaged a top third showing thanks to strong performances by  Fundamental Investors (ANCFX) and  Growth Fund of America (AGTHX). Talk about doing well with a lot of money. American Funds are off the charts in terms of assets but still boast solid performance. Only  Amcap (AMCPX) had subpar three-year returns, and those were just a notch below average. The firm continues to chug along nicely despite the growth.

Columbia is a welcome sight on this list as the firm has had its ups and downs. However, it's worth noting that most of the asset-weighted performance comes from two groups outside the Columbia core lineup: Wanger Asset Management and Marsico. The two firms have done a fine job of picking growth stocks in a tricky market for growth. In addition, Columbia added a new group that includes value stalwart David Williams when it acquired the Excelsior funds.

Fidelity edged out T. Rowe Price and Vanguard on this list. I bet you didn't see that coming. Admittedly, it's by a small margin.  Contrafund (FCNTX) (run by 2007 Manager of the Year winner Will Danoff) and  Growth Company (FDGRX) have been outstanding while  Magellan (FMAGX) and  Low-Priced Stock (FLPSX) have been solid. Is this a sign that Fidelity's massive effort to boost the quality and quantity of its analyst work is paying off? It's a little early to say, but it's nice to see this respectable showing.

As befits a mild-mannered firm like T. Rowe, nearly all its domestic-stock funds produced second- or third-quartile returns for the trailing three years.  Mid-Cap Value (TRMCX) was about the only top-quartile fund of note. The story was pretty similar for Vanguard, though its best and worst big funds were both subadvised by Wellington.  Vanguard Wellington (VWELX) produced top 10% returns while  Vanguard Windsor (VWNDX) (which is 70% managed by Wellington) was bottom 25% because of a wide array of weak stocks such as  E*Trade Financial Corporation .

Skipping Down toward the Bottom ...
American Century had an average percentile rank of 64%, or bottom 36%, and yet it actually had a strong 2007. For those glass-is-half-full types, the good news is that the firm's momentum funds enjoyed a great year as momentum stocks finally came to the fore. So, the good news is that  Vista  and  Heritage (ATHAX) have been smoking. The bad news is that  Select (TWCAX) and  Ultra (TWCUX) have poor three-year results. American Century certainly took notice and has put new people in a lot of key positions over the past two years. It bears watching to see if the comeback will continue.

Alas, I don't see a comeback at Putnam, which is 16 percentile ranks below American Century all the way down at bottom 20%. Remember how Janus and Putnam were linked in the eyes of the press and investors for their bear market performance and market-timing issues? Well, you can appreciate how far Janus has come when you see what a struggle it has been for Putnam. Consider Putnam's two largest funds:  Putnam Fund for Growth and Income  and  Voyager . Both have bottom-quartile three-year returns, frequent manager changes, and strategy tweaks. Equally telling is the performance of  Putnam Research (PNRAX), which is supposed to surface the stock ideas of the firm's analysts. That fund's 5.5% annualized return lands in the bottom 10% of its category and lags the S&P 500 by an annualized 3.15%. Ugh.