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Fund Spy

One of the Best Fund Companies You've Never Heard Of

A hidden gem from upstate New York.

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Thanks to the bear market, many fund sponsors are on the auction block. That, alas, is not necessarily good news for shareholders of the affected funds. Deals involving money-management firms often lead to mergers and manager shakeups. That is one reason I like funds offered by employee-owned asset managers: Such companies rarely put themselves up for sale.

One modest, employee-owned asset manager you've probably never heard of is Manning & Napier. Although the firm, based in Fairport, N.Y., runs $16 billion in total, it's a blip in the fund world, with $5.2 billion spread among 17 funds. But in recent years Morningstar has warmed to the M&N funds, even if few others have.

Collegial Approach
The big draws at Manning & Napier are consistency and discipline. A nine-member team, supported by 43 analysts and 11 economists, manages all of the funds. The managers and analysts search for strong companies trading at reasonable valuations--usually at least 25% below what they think the companies are worth. Thousands of funds have a similar approach to stock-picking, but they lack M&N's strong emphasis on downside protection and successful results.

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Russel Kinnel does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.