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.

 
 
Sep 01, 2015
Welcome !
Find Fund Report
Please input a ticker or fund name.
 
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
What Happened With ETF Pricing on Monday?
If you invest in exchange-traded funds, you may have noticed some weird things going on Monday. Ben Johnson explains what happened in this video
Opportunity in High Yield?
Sumit Desai takes a look at high-yield funds in the wake of falling oil prices. 
The US Economy Is Solid
Bob Johnson reminds us in this video that the U.S. economy is in fine shape, even with all the recent market turmoil. 
Sequoia on a Roll
You may have noticed that the closed Sequoia SEQUX is having a remarkable year. Here is Kevin McDevitt’s analysis.
The Sequoia team's faith in its top holding has been richly rewarded. Recall that Valeant Pharmaceuticals' shares VRX, which claimed 26% of the March 2015 portfolio, struggled through the first seven months of 2014 as the company waged a high-profile takeover battle for Allergan AGN, which it eventually lost. The market believed that Valeant would not be able to grow at an attractive rate without Allergan. But managers Bob Goldfarb and David Poppe contended that the company still enjoyed good organic growth prospects. The market has come around to their perspective, more than doubling the share price during the 12 months through July 2015.
Given its position size, Valeant's revival has had an outsized impact on the fund's results. After muddling along for the prior three years, it has gained 29.5% annualized through July 2015, which is nearly triple the S&P 500's 11.2% return. The fund has traditionally lagged its benchmark in the latter stages of a bull market, but Valeant's surge has broken that trend. The fund has also benefited from Berkshire Hathaway's BRK.B recently announced acquisition of top-10 holding Precision Castparts PCP.
But having 26% of assets in one company creates significant stock-specific risk. It's the fund's largest single position since Berkshire, which is still 11.4% of assets, and claimed 28.7% of the portfolio in December 2006. But Valeant arguably carries more risk than Berkshire. As a conglomerate, Berkshire was diversified across a number of industries and maintained a stronger balance sheet. Valeant is focused on pharmaceuticals and has a highly leveraged balance sheet with a debt/capital ratio of 82.5%.
Goldfarb and Poppe are comfortable, though, with both Valeant's balance sheet and valuation. They believe that synergies and cost savings within recent acquisitions and strong growth prospects make the balance sheet stronger than it may appear while keeping the shares reasonably priced. Their ability to see and capitalize on such developments helps the fund retain a Morningstar Analyst Rating of Gold.

 

Customer Support

Product Support


Inquiries regarding your subscription such as address changes, missing/damaged issues, etc.
Phone: 1-800-957-6021 | Mon-Fri 8:30AM-5:00PM

Inquiries regarding technical issues such as logging in or downloading
Phone: 1-312-424-4288 | Mon-Fri 8AM-6PM
Email: newslettersupport@morningstar.com

 

Product Sales


Inquiries regarding your subscription renewal, billing or to learn about other Morningstar investment publications and resources
Phone: 1-866-608-9570 | Mon-Fri 8AM-5PM
Email: ussales@morningstar.com