Five Medalist Funds Courting Key-Man Risk
Not everyone is Bill Gross, but these managers would cause a stir if they left, too.
There is only one Bill Gross. In the wake of his abdication from PIMCO, my colleagues and I have tried to think of other mutual fund managers whose career moves could instantly set tens of billions of dollars in motion, jolt securities markets, and call into question the Morningstar Analyst Ratings of dozens of funds across the world, not to mention the prospects of whole fund families. There aren't any whose departures would have the global ramifications that Gross' jump has had, but there are plenty whose exits would have severe repercussions for their funds and firms. Few are truly one-man or one-woman shows, but they all tend to have unique approaches closely identified with one person, large asset bases, and a certain degree of renown. Here's a look at some funds with Morningstar Analyst Ratings that fit that description. In most cases, there is no reason to think these managers are about to bolt, and we're not recommending you sell their funds because they might. It's still worth keeping the risk in mind, though.
Don't Try This at Home
Top of the list is the Silver-rated Fidelity Contrafund (FCNTX). Will Danoff runs more than $140 billion in this fund and others in a style that is hard to characterize. Like many Fidelity managers, he follows the mantra of "stock prices follow earnings" and looks for companies with improving profits. He does it in an inimitable way. Continually meeting with thousands of company management teams and repeatedly conversing with members of Fidelity's sprawling legion of global analysts is at the core of his process. He constantly compares what he learns to what he has gleaned from three decades of such interactions, so a lot of what he does is in his head or in the tattered spiral notebook he carries with him to jot down the tickers of every company he meets with. It's a mercurial approach, but one that has worked not only when the fund was smaller, more concentrated, and faster-trading, but also in its current huge, more diversified, and lower-turnover state.
Dan Culloton does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.