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
Updated PDF Posted

The first electronic copy of the November issue of FundInvestor had up arrows next to every fund's star rating. We have since corrected that and loaded the new non-loco version to the site.

The Investment World Still Has a Ways to Go
Many FundInvestor subscribers have come to us after a bad experience with a broker. So, Christine Benz's story of an advisor crossing some red lines in her own home may resonate with you.

High High High
We've just published our rating of reader favorite T. Rowe Price Capital Appreciation. It rates a rare High for People, Process, and Parent. And, naturally, it still has a Morningstar Analyst Rating of Gold overall. Here is Leo Acheson's take.

A highly talented manager and topnotch process give T. Rowe Price Capital Appreciation an edge. All of its share classes receive a Gold Morningstar Analyst Rating.

David Giroux has led the fund since mid-2006 with incredible skill. He uses an opportunistic and highly disciplined approach, making asset-allocation shifts and picking securities to capitalize on market inefficiencies and overreactions. Equities have ranged from 57% to 72% of assets, with Giroux upping risk after drawdowns, such as those seen in 2008 and 2011, and becoming cautious in the late stages of the economic cycle, as he has recently.

He manages the rest of the portfolio, which may include high-yield and investment-grade debt, leveraged loans, convertibles, preferreds, covered calls, and cash, in a similar way. Giroux’s execution sets the fund apart. He stays a step ahead of the market, acting on opportunities before most competitors. In 2018, perceived risks and market complacency led him to buy Treasuries for the first time in five years and add heavily to utilities. Both beat all other bond and equity sectors, respectively, during the year.

Following the year-end equity sell-off--an overreaction, he felt--he quickly re-risked the portfolio. Those moves helped the fund place in its peer group’s top percentile and beat Vanguard Balanced Index by 3 percentage points in 2018 and in the year to date through September 2019.

The fund’s allocation moves explain only part of its outperformance. Giroux and team conduct deep fundamental research and build a high-conviction, 40-stock portfolio. Stock selection has added tremendous value relative to the S&P 500. The fund amassed one of the most impressive records among allocation--50% to 70% equity Morningstar Category peers: Out of 108 rolling one-year periods during the last decade, it placed in its peer group’s top quartile and beat Vanguard Balanced Index (by an average of more than 2 percentage points) about 90% of the time. This fund remains a true gem.

 

 

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