One of the Best Fund Companies You've Never Heard Of
A hidden gem from upstate New York.
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.
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.
Russel Kinnel does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.