The Most Unloved Medalists of 2014
Should investors be showing these funds more love?
The quantitative Morningstar Rating for Funds, or the star rating, often correlates with fund flows. Morningstar's qualitative Analyst Ratings, however, don't always move in the same direction as sales. Frequently, but not always, when investors seem to be selling funds, our analysts will maintain Gold, Silver, or Bronze ratings on them. We try not to be reflexive contrarians and to judge each fund on its own merits, using their people, process, parent, performance, and price as our guides. To help illustrate, here is a look at 2014's 10 most unpopular U.S.-based mutual funds with Morningstar Analyst Ratings, in terms of net outflows and what Morningstar analysts currently think of them.
Half of the funds on the list are from PIMCO. That's not surprising given that chief investment officer Bill Gross split with the firm he founded in a high-profile snit in September 2014. His PIMCO Total Return (PTTRX) saw the most outflows of all of our rated funds for the second year in a row as $103 billion left the fund in the 12 months ended in December. Investors had been selling the fund before Gross' soap-operatic departure; the fund saw $42 billion in outflows in 2013, probably because of mediocre recent performance and growing investor appetite for more-adventuresome bond funds.
Dan Culloton has a position in the following securities mentioned above: PTTRX. Find out about Morningstar’s editorial policies.
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