Fundmastery Blog

Kurt Brouwer September 19th, 2007

Every year, Morningstar seeks out mutual fund portfolio managers who have done a great job and then comes up with the manager of the year in a few categories.

This year three of the mutual funds we use for our portfolios are nominees for International-Stock Manager of the Year. William Samuel Rocco at Morningstar reports (free registration required):

‘This year is roughly three fourths over, so it’s a good time to examine how the three contests for Morningstar Manager of the Year are developing. We’ll identify the front-runners for the International-Stock Manager of the Year in this column;…

…As longtime readers know, we present these awards every January to managers who are seasoned as well as talented and who have delivered superior results regularly in the past as well as over the preceding 12 months. We also insist that the winners be from firms that are dedicated to treating the investors in their funds well.

With that in mind, we first screened for international funds with strong year-to-date and longer-term returns plus above-average or better Stewardship Grades. We then looked at the overall credentials of the managers and identified eight candidates who stand out. Four of these current favorites have been named International-Stock Manager of the Year in the past, while the other four front-runners, although highly–and rightly–respected, have yet to win the award. Here the details on the skippers in both groups…’

‘…The Team at Dodge & Cox International Stock (DODFX)
This team has a lot going for it. It follows a wide-ranging and slow-moving value strategy that has considerable inherent appeal, that has earned exceptional long-term results at the family’s domestic-equity offering, and that limits transaction costs. And the team hasn’t missed a beat since winning the 2004 award. It produced strong results in each of the next two calendar years by making a wide variety of good picks, and it has done the same thus far in 2007, so this foreign large-value fund’s shorter-term and overall records are both exceptional.

Hakan Castegren of Harbor International (HAINX)
Castegren, who received the award in 1996, has used a slow-moving, blue-chip value strategy throughout his 20-year tenure. Although his willingness to delve into unpopular stocks and sectors has sometimes led to short-term underperformance, Castegren has generally executed his discipline deftly, as this foreign large-value fund’s topnotch three-, five-, and 10-year gains attest. And he has once again put his patient approach to good use in 2007 by making several good picks in the materials and other industries, so the fund sports top-decile year-to-date returns…’

Harbor International is a superb international fund that we have used for nearly two decades. Dodge & Cox International is a fund has performed very well over its history. The article also mentioned Europacific Growth (AEPGX), which we have used occasionally and Thornburg International (TGVAX), which we have not used. All of these funds have won the award previously. The article also mentions four up-and-comers.

Congratulations to all of the the funds for being named as contenders.

• Investing , Mutual Funds
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