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 manager 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.

 
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About Russel Russ' Photo
Russel Kinnel,
Director of Manager Research and Editor, Morningstar FundInvestor
Russel Kinnel is director of manager research for Morningstar, Inc. and editor of Morningstar FundInvestor, a monthly print newsletter for individual investors.
Featured Posts
A Boatload of Manager Changes
It must be that time of year. We are seeing quite a few manager changes as firms get ready for the new year. Today I'll share three pretty big changes that just came through. All three of the aforementioned funds are under review as we assess the changes.

Artisan International Small Cap Investor ARTJX
Artisan International Small Cap is getting a new look and will reopen. Rezo Kanovich, former skipper of Oppenheimer International Small-Mid Company OSMAX, will take the helm of this foreign small/mid-growth fund from Mark Yockey and Charles-Henri Hamker on Oct. 15. (Yockey and Hamker will remain at Artisan and continue to manage other funds.)

Two analysts that worked closely with Kanovich on the Oppenheimer fund, which is also a foreign small/mid-growth strategy, will come with him to Artisan and work on this fund.

Artisan International Small Cap will reopen to new investors on Oct. 15 after fairly significant outflows in recent years. It is expected to change its name and modify some of its investment restrictions during the fourth quarter. Kanovich is a seasoned and skilled investor who delivered strong results during his roughly 6.5-year tenure at Oppenheimer International Small-Mid Company. That strategy had a Morningstar Analyst Rating of Bronze and a Positive People rating when Kanovich left at the end of September; that fund is now also Under Review. Yockey and Hamker are experienced and talented investors themselves, and while they've posted weak returns at this fund in recent years, they've produced good long-term results at Bronze-rated Artisan International ARTIX and Bronze-rated Artisan Global Equity ARTHX (where they work with a third manager).

This fund's portfolio is likely to look much different with Kanovich at the helm. The investment restrictions are being modified to give this fund greater leeway, and the approach Kanovich employed at the Oppenheimer offering differs significantly from the one Yockey and Hamker have been using here. The Oppenheimer fund's average market cap has often been much higher than this fund's, and only nine of that fund's 153 holdings as of Aug. 31 were in this fund's latest portfolio.

Also of note is the fact that Kanovich was running $10.4 billion in his Oppenheimer strategy compared with $410 million in the vehicle he is taking over.

One thing to note while you ponder these changes is that Kanovich's style is one that is prone to long hot and cold streaks as he is willing to have significant differences in sector and country weightings relative to peers and benchmark. So, this fund is best used by those who plan to hold it for a long time.

Sequoia SEQUX
Sequoia's Morningstar Analyst Rating is Under Review after Ruane, Cunniff & Goldfarb announced that comanager David Poppe plans to retire at year-end. Although the fund has been team managed since 2016, Poppe is the longest-serving comanager, having been named in March 2006. Poppe led the firm and the fund through its most tumultuous period. Poppe became lead manager and the firm's CEO after the fund's Valeant Pharmaceuticals VRX debacle and the March 2016 resignation of former lead manager and CEO Bob Goldfarb. Along with other senior members of the firm, he created the fund's current investment committee and added several checks and balances to the investment process, as well as upgrading the firm's technology and operations.

Although Poppe is just entering his mid-50s, this move isn't terribly surprising. When the firm converted from an S-Corporation to a partnership in March 2018, firm veteran John Harris replaced Poppe as the firm's leader and managing partner.

After Poppe's departure, the fund's investment committee will shrink to five people, with four of them voting members. Meanwhile, Arman Gokgol-Kline, Trevor Magyar, and Chase Sheridan will join Greg Alexander and Harris on the firm's management committee.

Lord Abbett Value Opportunities LVOAX
Lord Abbett Value Opportunities' Morningstar Analyst Rating is Under Review in the wake of a sweeping manager change. On Friday, Oct. 5, 2018, the firm replaced longtime managers Tom Maher and Justin Maurer with Eli Rabinowich and John Hardy. Maher had comanaged the fund since the end of 2005;Maurer had joined him at the end of 2007.

New manager Rabinowich joined the firm in September 2018 from Pzena Investment Management to take over Neutral-rated Lord Abbett Mid Cap Stock LAVLX, which he will continue to run. Hardy has deeper roots at the firm. He started as a technology and energy analyst on Maher and Maurer's team in 2011 and had served as their associate portfolio manager since September 2017.

Understanding Fund Tax Data
Finally, I wanted to share an article from Karen Wallace on how you can make sense of mutual fund tax data.

 

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