Morningstar Fund Analyst Picks' Batting Average Improves

In FundInvestor, we've been reporting on the performance of our Morningstar Fund Analyst Picks since June 2007 using data that goes back to the beginning of our picks in 1999. In the Morningstar FundInvestor newsletter each month, we tell you how the picks in a category or two have done and how the picks as a whole have done. Click here for some recent data.

You can find all of our current Fund Analyst Picks  here.

I want to take a step back to see how those things have changed and how we calculate the performance.

Batting Average
The batting averages tell you what percentage of our picks have outperformed their peers over the trailing five years. We weight the figure based upon how long a fund was a pick in that time period. If one fund was a pick for all 60 months and another was there for 30 months, then the first fund gets twice the weighting of the second.

Looking back at the figures we published in June 2007, our record has improved in four out of five broad asset classes (domestic equity, international equity, taxable bond, municipal bond, and balanced). Our balanced-fund batting average has moved to 86% from 80%. Two of our top performers have been  Vanguard Wellington (VWELX) and  Vanguard Wellesley Income (VWINX). When you have excellent management and low costs, good things tend to happen.

U.S. equity has bumped up to 64% from 60% thanks to strong performance from the likes of  Fairholme (FAIRX) (picked in 2005) and  Primecap Odyssey Aggressive Growth (POAGX) (2006).   Vanguard Growth Equity  (2000) was one of our weakest performers--we removed it in 2008.

Slumps and Rally Caps
International equity is the one spot where our record has deteriorated, as the batting average has fallen to 62% from 70%.  Mutual Quest (TEQIX) has its detractors, but we like its conservative approach and stock-selection abilities. On the plus side,  Matthews Pacific Tiger (MAPTX) (1999) has been a big winner.

Our municipal-bond batting average has surged to 96% from 88%. Among our many muni successes are  Fidelity Municipal Income (FHIGX) (1999) and  T. Rowe Price Tax-Free Short-Intermediate (PRFSX) (2000).

Our taxable-bond batting average has enjoyed a solid uptick, rising to 84% from 63%. One big contributor has been  Fidelity Floating Rate High Income (FFRHX). We picked it for its conservative strategy and strong research, but initially it was well behind its category peers. However, it stood up brilliantly in 2008 and now has the best record in the bank-loan category.

I should note we also have a second way of tracking our picks' performances: We roll up returns by asset class and compare them with a benchmark. You can find that information by clicking the Funds tab above.

A version of this article originally ran inMorningstar FundInvestor.

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