Winners of the 2019 Morningstar Awards for Investing Excellence
The trophies go to managers and a firm that put investors first.
Today, Morningstar revealed the winners of the 2019 Morningstar Awards for Investing Excellence in three categories: Outstanding Portfolio Manager, Rising Talent, and Exemplary Stewards. The winners of each award demonstrate the industry’s very best attributes, including investment skill, the courage to differ from the consensus to benefit investors, and an alignment of interests with the strategies’ investors.
The Outstanding Portfolio Manager nominees have distinguished themselves over the long haul by delivering excellent returns to their investors, while the nominees for the Rising Talent award include portfolio managers who have excelled over shorter tenures and shown great future promise. The firms nominated as Exemplary Stewards have consistently put client interests before their own, yielding better results for shareholders.
Morningstar’s manager-research analysts chose the winners from short lists of nominees they compiled based on the criteria in each category. The analysts considered in-depth qualitative evaluations of each nominee and then voted for the nominee they found most deserving. The winners were announced at the firm’s annual Morningstar Investment Conference in Chicago.
The named winners follow, with some detail on what makes them stand out.
2019 Outstanding Portfolio Manager
Dan Fuss, CFA
Manager Tenure: 28 years
Dan Fuss pioneered the benchmark-agnostic, multisector approach to fixed income that has defined the firm’s flagship Loomis Sayles Bond (LSBRX) since 1991. During his tenure at Loomis Sayles, he’s demonstrated a value-driven, often contrarian, and aggressive strategy that’s contributed to an impressive long-term record for the fund and its siblings.
That said, Fuss has not just chased yield or indiscriminately purchased cheap bonds during periods of market turmoil. At the core of his approach are deep research and careful analysis. Once an investment meets his criteria, he’s been willing to go against the crowd, and to buy and hold through bouts of market turbulence. For example, he bought convertibles and zero-coupon bonds in 1994’s bond-market rout, and added battered Latin American sovereign bonds in the mid-1990s following the Mexican peso crisis. In more recent years, wins for the fund have come from shrewdly moving into Irish sovereign debt at the height of that country’s troubles, adding troubled European bank debt in 2011 against the backdrop of the eurozone crisis, and expanding the fund’s allocation to junk-bond names (including energy issues) during 2014's and 2015’s commodity-driven troubles. There’s no denying the substantial risks in Loomis Sayles Bond--which has at times included single-digit allocations to dividend-paying common stock--but investors who have stuck with Fuss through the inevitable ups and downs have been well-rewarded with topnotch long-term returns.
Fuss also deserves credit for working with firm CIO Jae Park to codify the firm’s fixed-income investment process and to develop the next generation of bond investors at Loomis Sayles. Today, he works closely with comanagers Elaine Stokes, Matt Eagan, and Brian Kennedy, who have gradually taken increasing responsibility for the day-to-day management of the funds; Stokes and Eagan have been named managers on Loomis Sayles Bond since 2007.
2019 Rising Talent
James Marchetti represents the next generation of talented investors at growth equity boutique Primecap. Marchetti has been a named manager on Primecap Odyssey Aggressive Growth (POAGX), Primecap Odyssey Growth (POGRX), and Primecap Odyssey Stock (POSKX) since November 2014; and Vanguard Capital Opportunity (VHCOX), Vanguard Primecap (VPMCX), and Vanguard Primecap Core (VPCCX) since January 2015. All six strategies receive Morningstar Analyst Ratings of Gold.
Marchetti joined the firm in 2005 as a biotech analyst following graduate school at MIT. Primecap has long invested heavily in biotech stocks, and successful biotech picks have been a major factor in the outstanding performance of Primecap’s six strategies during Marchetti’s tenure at the firm, despite providing occasional headaches. Marchetti is listed alongside four fellow comanagers, and while Primecap doesn’t release results of individual sleeve managers, attribution indicates that Marchetti's contributions are significant. Primecap has a long-standing record of investment excellence and doesn’t often add to its managerial ranks. Marchetti’s ascent suggests he will be a cornerstone for the firm’s future.
2019 Exemplary Stewardship
The Vanguard Group
The Vanguard Group's unusual corporate structure has made it a stand-out steward of capital from its mid-1970s origins. The firm's U.S. funds (and indirectly their shareholders) jointly own Vanguard, facilitating a commitment to rock-bottom fees and sensible investment strategies.
Vanguard's mission to serve investors extends beyond its own flock, and it’s had a broad influence on the U.S. asset-management industry through indexing, no-load distribution, and lowering costs for investment management. While fee pressure came to Vanguard in 2018, when a competitor launched zero-fee index funds, Vanguard remains unmatched for its low fees across the board.
Vanguard is setting its sights on exporting this successful approach to markets outside of the U.S. In addition, the firm also has designs on expanding into other verticals like the advice business, where it has already made inroads, and is pursuing plans to upgrade its technology and client service to respond to the needs of its expanding customer base.
Morningstar analysts Alfonzo Bruno, Christopher Franz, and Bridget B. Hughes contributed to this article.
Laura Pavlenko Lutton does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.