With many retirement accounts in tatters, plenty of Americans are content with the fund managers who managed to keep them from losing too much money during the worst market conditions since the Great Depression. But it turns out, a select few investing pros have done much better, actually producing exceptional returns -- in some cases more than 200% in cumulative returns -- over a most challenging decade.
Independent research firm Morningstar (MORN) has compiled a list of 15 fund managers who really pulled it off. The managers of these funds have navigated through two recessions and out-performed other funds in their categories, producing cumulative returns over the decade ranging between 45% and 233%. While past success is no guarantee of success in the future, investors may want to take note of these winners as they plan their investments for the next decade.
The list of fund managers is part of Morningstar's "Fund Manager of the Decade" award competition. In January, the company will select one winner in three broad asset classes -- domestic stock, international stock and fixed income -- but the real winners are those who invested in any of the 17 funds managed by the 15 nominated fund managers over the last decade.
"The past 10 years have been the most brutal for investors since the 1930s," says Karen Dolan director of mutual fund analysis at Morningstar. "Two severe bear markets wiped out years of prior gains and have left many investors with uninspiring returns over the entire period."
While each of the successful fund managers use different strategies, Morningstar senior analyst Gregg Wolper says they share a common strategy. Rather than chasing quick gains by gathering assets or jumping into a trendy investment vehicle or sector, they focus on long-term returns. Wolper also says the majority of the managers were cautious, but not so cautious that they were too conservative.
"Some of them can be very innovative, creative and bold in their decision-making," Wolper explains, "but they tend to keep in mind that avoiding big losses is one of the most valuable things a money manager can do."
Of course, there's no guarantee that investing in these funds now will prevent investors from losing money during the next decade. However, these managers' track records of avoiding losses over the last decade from Jan. 1, 2001 to Nov. 18, 2009 (when they were nominated) certainly makes them worth a look:
Domestic-Stock Fund Manager of the Decade
Bruce Berkowitz, Charles M. Fernandez; Fairholme (FAIRX)
Annualized return 12.98%; Cumulative return 233.97%; Value of $1,000 initial investment: $3,339.71.
Don Yacktman, Stephen Yacktman, Yacktman (YACKX)
Annualized return 11.92%; Cumulative return 204.43%; Value of $1,000 initial investment: $3,044.35.
Charlie Dreifus, Royce Special Equity Investment (RYSEX)
Annualized return 11.90%; Cumulative return 203.89%; Value of $1,000 investment: $3,038.91.
Joel Tillinghast, Fidelity Low-Priced Stock (FLPSX)
Annualized return 10.96%; Cumulative return 179.53%; Value of $1,000 initial investment: $2,795.26.
Steve Romick, FPA Crescent (FPACX)
Annualized return 10.76%; Cumulative return 174.58%; Value of $1,000 initial investment: $2,745.80.
International-Stock Fund Manager of the Decade
Jean-Marie Eveillard, Abhay Deshpande; Matthew B. McLennan; First Eagle Global A (SGENX)
Annualized return 12.44%; Cumulative return 218.77%; Value of $1,000 initial investment: $3,187.67.
David Herro, Oakmark International Small Cap I (OAKEX)
Annualized return 10.43%; Cumulative return 166.62%; Value of $1,000 initial investment $2,666.24.
David Herro, Robert A. Taylor, Oakmark International I (OAKIX)
Annualized return 8.20%; Cumulative return 117.84%; Value of $1,000 initial investment: $2,178.43.
Dennis Stattman, BlackRock Global Allocation A (MDLOX)
Annualized return 8.73%; Cumulative return 128.62%; Value of $1,000 initial investment: $2,286.20.
The team, Manning & Napier World Opportunities A (EXWAX)
Annualized return 8.52%; Cumulative return 124.44; Value of $1,000 initial investment: $2,244.40.
The team, American Funds EuroPacific Growth A (AEPGX)
Annualized return 3.87%; Cumulative return 45.48%; Value of $1,000 initial investment: $1454.78.
Fixed-Income Fund Manager of the Decade
Dan Fuss, Loomis Sayles Bond Retail (LSBRX)
Annualized return 8.61%; Cumulative return 126.16%; Value of $1,000 initial investment: $2,261.57.
Jeffrey Gundlach, TCW Total Return Bond I (TGLMX)
Annualized return 7.94%; Cumulative return 112.83%; Value of $1,000 initial investment: $2,128.26.
Bill Gross, PIMCO Total Return Institutional (PTTRX)
Annualized return 7.77%; Cumulative return 109.54%; Value of $1,000 initial investment: $2,095.36.
The team, Dodge & Cox Income (DODIX)
Annualized return 6.85%; Cumulative return 92.40%; Value of $1,000 initial investment: $1,924.03.
Christine Thompson, Jamie Pagliocco; Fidelity Municipal Income (FHIGX)
Annualized return 5.68%; Cumulative return 72.64%; Value of $1,000 initial investment: $1,726.42.
Christine Thompson, Jamie Pagliocco; Fidelity Advisor Municipal Income A (FAMUX)
Annualized return 5.44%; Cumulative return 68.86%; Value of $1,000 initial investment: $1,688.58.
Introduction to ETFs
The basics of Exchange Traded Funds and why ETFs are hot.View Course »