Last year was a great year to be a stock fund manager but a challenging one for fixed-income fund managers. For our 2013 Morningstar Fund Managers of the Year, greater exposure to equity-sensitive markets, deft security selection, and diversification paid off. Some winners benefited by adding to bets that had been unpopular in preceding years. Others benefited by placing enough different bets that the ones they got right offset those they didn't.
A quick markets recap puts our winners' performances into context. Domestic equities led the way, with the S&P 500 Index returning a remarkable 32.4%. Small- and mid-cap stocks did even better, and health care and tech were the places to be. International equities as measured by the MSCI EAFE Index rose 22.8%, as the eurozone's continuing woes weighed on improving sentiment. Emerging markets struggled, with the MSCI Emerging Markets Index losing 2.3%.
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Michael Herbst does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.