Why We Upgraded This Income Fund

Portfolio managers and investment teams are key to a strategy’s performance potential. In evaluating investments, Morningstar analysts consider management structure, experience, and supporting resources, among other areas, all of which culminates in a fund’s People Pillar rating. In November, here were some of the notable upgrades and downgrades to our assessments of People.

A Small but Capable Team

Nuveen Lifecycle Index Retirement Income TRILX benefits from strong underlying index funds, seasoned management, and the comprehensive supporting resources, warranting an upgrade to its People Pillar to Above Average from Average. Former lead manager Hans Erickson retired in 2023 and was replaced by John Cunniff, who has been a manager on this fund since its inception in 2006. Cunniff continues to be supported by Steve Sedmak, who joined the fund in 2016 and was named a portfolio manager in 2018. Four associate managers round out the team, who all have 15 or more years of industry experience.

Together, the team manages several other target-date offerings and a handful of multi-asset strategies. It is a wide range of responsibility for this six-person team, but the team follows a similar approach to asset allocation for all its mandates and uses many of the same underlying funds across its strategies. The team members also have oversight and support from the firm, including Nuveen’s global investments committee, whose asset-class experts provide the capital market assumptions used to build the portfolio’s strategic asset allocations. Combined with the fund’s Above Average Process Pillar rating and attractive price, the improved People Pillar rating led to an upgrade to the fund’s Morningstar Medalist Rating to Silver from Bronze.

Key Morningstar Metrics for Nuveen Lifecycle Index Retirement Income TRILX

• Morningstar Medalist Rating: Silver
• Process Pillar: Above Average
• People Pillar: Above Average
• Parent Pillar: Average

Improved Team Stability and Encouraging Performance

Turnover plagued the team at Lord Abbett Mid Cap Stock LAVLX for years, but it has stabilized recently, leading to a People Pillar upgrade to Average from Below Average. Former lead manager Eli Rabinowich left the firm in August 2021 after less than three years, during which time he posted poor results. Rabinowich’s exit was the third manager departure in as many years. He was replaced by Jeff Diamond, a comanager here since 2008, including a stretch leading the strategy from 2013 to Rabinowich’s arrival in September 2018. John Hardy became a manager on this strategy in September 2020, while financial analyst Michael Kovac was promoted to manager in May 2024. Diamond is nearing retirement age, Kovac is new, and Hardy carries a heavy workload as a manager across the market-cap spectrum of the value team’s multiple charges. Still, oversight is sufficient, and the managers are supported by a decently experienced value analyst team of 13, whose median member has spent eight years at the firm and two decades in the industry. Turnover there has stabilized, too—just one analyst has left over the past three years.

The strategy has posted a strong three-year record through October 2024, an encouraging sign after poor performance over Diamond’s previous approximately five-year leadership tenure from October 2013 to August 2018, as well as his entire tenure since June 2008. That gives investors some hope that this team may be finding its footing. The upgraded People rating led to this fund’s Morningstar Medalist Rating upgrade to Neutral from Negative.

Key Morningstar Metrics for Lord Abbett Mid Cap Stock LAVLX

• Morningstar Medalist Rating: Neutral
• Process Pillar: Average
• People Pillar: Average
• Parent Pillar: Average

A Thoughtful and Repeatable Approach, but Changes to the Team Give Pause

The team at T. Rowe Price Summit Municipal Intermediate PRTMX remains collaborative, sizable, and with many experienced investors in its ranks. Yet recent personnel turnover is a reason for pause and drops the strategy’s People Pillar rating to Above Average from High. Seasoned portfolio manager Charlie Hill has been running this strategy since its 1993 inception, and before that, he spent a decade as a muni trader and portfolio manager. Hill is one of eight portfolio managers on T. Rowe Price’s tax-exempt team, which collectively oversees roughly $28 billion in assets. That crew includes one-time muni quantitative analyst James Lynch, who moved into an associate portfolio manager’s role here in 2020 and joined this strategy’s roster alongside Hill in mid-2024.

T. Rowe’s tax-exempt team is mostly a tenured group, although not without some changes. For example, veteran muni manager Dino Mallas, who is named on the firm’s tax-free income and summit municipal strategies, retired at the end of 2023. Two years before, Hugh McGuirk, who served as the head of T. Rowe’s muni team, retired from the firm, and high-yield muni portfolio manager Jim Murphy stepped into that role in September 2021. The current 13-member mix of analysts and traders supporting the strategy have also experienced ongoing changes. In 2024, for example, four members of the team departed the firm—two credit analysts, an associate analyst, and a trader. The downgrade in People contributed to a downgrade to the fund’s Morningstar Medalist Rating to Bronze from Silver.

Key Morningstar Metrics for T. Rowe Price Summit Municipal Intermediate PRTMX

• Morningstar Medalist Rating: Bronze
• Process Pillar: Above Average
• People Pillar: Above Average
• Parent Pillar: High

Morningstar researchers Mahi Roy, Drew Carter, and Elizabeth Foos contributed to this article.