January 5, 2011 / 6:51 PM / 8 years ago

Morningstar names top fund managers for 2010

BOSTON (Reuters) - Four fresh faces took top mutual fund industry honors when research firm Morningstar Inc on Wednesday named stock pickers at Ruane, Cunniff and Goldfarb, Janus Capital Group and Franklin Resources as its top stock managers of 2010.

Robert Goldfarb and David Poppe, who run the $3.4 billion Sequoia Fund, were crowned as the year’s best domestic stock pickers for their long-term success in picking top companies, like Berkshire Hathaway, at reasonable prices.

Janus’s Brent Lynn, who runs the $13.5 billion Janus Overseas Fund, won as the best international stock picker. He owns names like Delta Airlines and Valero.

Michael Hasenstab, who runs Franklin’s $46.5 billion Templeton Global Bond Fund, was named the best fixed income manager.

The awards, which have previously been won by industry legends including Bill Gross and Bill Miller, are closely watched and can often help managers attract millions in new money from retail investors. Morningstar, which has been giving the awards since 1988, chooses managers who produce strong, long-term returns and adopt shareholder-friendly practices.

All winners have been managing money for years — indeed Goldfarb is coming up on his 40th anniversary — and navigated turbulent market conditions in 2010.

While their strong returns have made investors happy, the men are not household names — yet — and are not as famous as some others who were also in the running for the awards.

Goldfarb and Poppe beat out Bruce Berkowitz, previously crowned Morningstar’s Manager of the Decade, while Lynn topped the better-known David Winters.

Hasenstab topped PIMCO’s Mark Kiesel and TCW’s Tad Rivelle who were on the short list.

The Sequoia Fund was closed to new investors for a quarter of a century but reopened in 2008, now letting newcomers put their money with a fund whose 15-year annualized return is 9.7 percent. Last year the fund gained 19.5 percent, while the average peer was up 14 percent.

Lynn’s Janus Oversees Fund gained 19.28 percent in 2010, outpacing his category by more than 4 percentage points. Morningstar analysts who select the winners were especially impressed with how Lynn, who became the fund’s lead manager in 2003, navigated the last five years when the financial crisis hit. His annualized return over five years is 13.6 percent.

Hasenstab’s $46.5 billion fund gained 12.7 percent last year, bringing the best quartile of its world-bond category, for the eighth time in the past 10 calendar years since Hasenstab joined as a co-manager in 2001.

Reporting by Svea Herbst-Bayliss, editing by Dave Zimmerman, Bernard Orr

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