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.

 
 
Apr 20, 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
Heartbleed Not Impacting Morningstar FundInvestor

Morningstar FundInvestor is not affected by the "Heartbleed" vulnerability in recent versions of OpenSSL.

Morningstar is committed to providing a secure technological environment for our clients and products. To that end, we recommend that you update your password on a regular basis and never share passwords across multiple websites. We'll continue to monitor this closely and will take the appropriate measures to protect our clients' sensitive information.

First Morningstar Manager of the Year Dies
Jerry Palmieri, of Franklin Funds, died at age 85. Click here for more details.

TIAA CREF Buys Nuveen
TIAA-CREF has bought Nuveen for about $6 billion in cash and assumption in debt.

First Eagle Overseas Is Closing
First Eagle Overseas is closing to new investors on May 9. 

Scout International Lowered to Neutral
We have lowered our rating on Scout International to Neutral in light of James Moffett's planned transition off the fund. Here is Gregg Wolper's report:

Although Scout International has an impressive history, it doesn't stand out as it once did.

In spite of a subpar 2013, this fund's 10- and 15-year returns through April 3, 2014, land in the foreign large-growth category's top quartile. The return from its Sept. 14, 1993, inception through March 31, 2014, tops the group norm by more than 3 percentage points (annualized). Long-term volatility measures are milder than average. That's a testament to Jim Moffett, who has run this portfolio since day one.

In 2013, Moffett raised the fund's typically stingy stake in Japan, but not until well into the year, after Japan's roaring early-year rally had boosted rivals with larger stakes there. Also, this fund's cash stake was larger than average then, reflecting Moffett's concerns about the eurozone. That held back returns as many markets rose. (The cash stake has since been pared to 2% of assets.)

One unpleasant year for a time-tested fund isn't a concern. But there are bigger issues. On March 27, 2014, Scout Investments announced that Moffett will step down from this fund at the end of 2014 (he will continue to serve as chief international strategist for several years). On March 31, one of the fund's comanagers, Michael Stack, was elevated to co-lead manager alongside Moffett; in January 2015, Stack will become sole lead manager. The other comanager on the fund, Michael Fogarty, remains in that position.

Both Fogarty, who is director of international research, and Stack have worked on this fund in various roles since they joined the firm in 2002 and 2006, respectively. But they don't have independent records running a fund like this one. Stack managed a foreign small/mid-cap fund for Scout, but it had a so-so record and was liquidated last year. The analyst team remains in place. But Moffett's management decisions are what drove this fund. Those included many mid-cap picks, but mid-caps have become less common as assets have grown. Because the fund's long-term prospects aren't as compelling now, its Morningstar Analyst Rating has been reduced to Neutral from Bronze.

 

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