Investment Strategy
We seek to pick winning funds with superior management and quantitative characteristics linked to strong performance. Our quantitative research uses the most comprehensive mutual fund database in the world to determine the best strategies for long-term investing success. We then supplement those studies with extensive qualitative research of portfolio managers, analysts, and traders through onsite visits and follow-up phone calls.
 
About the Editor
Russel Kinnel is director of mutual fund research for Morningstar, Inc. and editor of Morningstar FundInvestor, a monthly print newsletter for individual investors. He also writes the Fund Spy column for Morningstar.com, the company's investment Web site.

Since joining the company in 1994, Kinnel has covered the Fidelity, Janus, T. Rowe Price, and Vanguard mutual fund families. He helped develop the new Morningstar Rating for funds and the new Morningstar Style Box methodology. He also is co-author of the company's first book, The Morningstar Guide to Mutual Funds: 5-Star Strategies for Success, which was published in January 2003.

 
 
Jul 23, 2014
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About Russel Russ' Photo
Russel Kinnel,
Director of Fund Research and Editor, Morningstar FundInvestor
Russel Kinnel is director of mutual fund research for Morningstar, Inc. and editor of Morningstar FundInvestor, a monthly print newsletter for individual investors.
Featured Posts
Midyear Update From Morningstar Experts

Morningstar checked in on the state of the investment world at the halfway point of the year. You can see the video here. My part is toward the end.

Oakmark Equity & Income Rated Silver
Meantime, we've updated our take on Oakmark Equity & Income. Here's Greg Carlson's take.

Look past Oakmark Equity & Income's recent uneven relative returns.

This fund owns a superb long-term record, but it lagged more than three fourths of its category peers in 2009, 2010, and 2012 and sits in the middle of the pack in 2014 through July 8. (The fund resided in the moderate-allocation category before moving to aggressive allocation in 2013.) Thus, the fund trails more than 90% of its peers over the past five years. Investors have responded by withdrawing a net $4.4 billion since the start of 2012.

But the fund's struggles should be kept in perspective. Even when it's lagged lately, the fund has generated solid absolute returns--it's gained an annualized 13.2% over that five-year span. What's more, it's never been constructed to thrive in bull markets, even though the fund's equity weighting has risen as high as 75% of assets in recent years (prompting the move to the aggressive-allocation category). Furthermore, stock-selection errors in the health-care and energy sectors have dented returns at times. But Clyde McGregor, lead manager since the fund's 1995 inception, and his team seek out companies whose shares trade at significant discounts to their estimate of value yet boast solid balance sheets and steady revenues. And within the fixed-income portfolio, the team has played it safe, focusing heavily on cash and government-backed bonds with short maturities based on its belief that corporate bonds are pricey and interest rates will eventually rise. That strategy proved costly in recent years as rates generally stayed low and lower-rated debt outperformed.

When the equity or bond markets run into trouble again, the fund's relative results should improve. Since its inception, the fund has lost just 48% as much as its typical peer in declines. It also held up significantly better than the category norm when interest rates rose (and bond prices dropped) in mid-2013. The fund remains an excellent holding.

 

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