Morningstar has announced the winners of its 2021 U.S. Morningstar Awards for Investing Excellence in three categories: Outstanding Portfolio Manager, Rising Talent and Exemplary Stewardship.
They are Fidelity’s Joel Tillinghast for Outstanding Portfolio Manager; Pimco’s Sonali Pier for Rising Talent and Dodge & Cox for Exemplary Stewardship.
Joel Tillinghast has managed the Fidelity Low-Priced Stock fund (FLPSX) for almost 22 years, shaping its “long-term track record to be among the industry’s best,” according to Morningstar. He focuses on “resilient companies with staying power, doesn’t chase fads, avoids firms that lack enduring competitive advantages or load up on debt, and scrutinizes executives’ integrity and prowess.“
Morningstar noted that although his patient and risk-conscious approach can lag during bull markets, it has also produced steady gains, subdued volatility and impressive downside protection, keeping its risk-adjusted results consistently strong, especially during stressed market environments such as 2020′s pandemic-induced bear market.
The fund had a large (41%) stake in non-U.S. stocks as of January, well above its typical peer’s 6%, according to Morningstar, and a preference for consumer cyclical stocks and relatively light exposure to financial stocks, which also helped it stand out from the herd. Tillinghast is supported by a team of more than 100 global analysts and five co-managers.
Pimco’s Sonali Pier became one of the named managers on Gold-rated Pimco Diversified Income (PDIIX) in February 2017 after working at Pimco for four years and has distinguished herself by a “willingness to take less risk even if that positioning goes against conventional wisdom,” according to Morningstar.
It notes that the approach “is crucial for high-beta strategies such as Pimco Diversified Income, where the penalty for getting things wrong can be much more severe than the reward for getting things right” and it has succeeded. Over Pier’s tenure from February 2017 through May 2021, both the annualized and risk-adjusted returns of the fund placed in the top quintile of Morningstar’s multisector bond category.
Dodge & Cox
Dodge & Cox won for the Exemplary Stewardship award because of “its singular approach to investing; specifically, its value-oriented, often contrarian, investment style that considers a company’s entire capital structure has helped define the seven stock and bond mutual funds it has launched,” according to Morningstar.
The firm has a “pristine reputation,” which helps it attract talent and maintain stable investment teams that build portfolios through teamwork and consensus, and its strategies have delivered impressive long-term performance, according to Morningstar.
It noted that the firm launched its first stock fund focused on emerging markets even though it its international-stock and global-stock funds have invested in emerging markets for years. The new fund is also priced in the bottom quartile of its peer group, which has been the firm’s practice.
Another hallmark of the firm, according to Morningstar: its well-telegraphed and seamless transitions from one generation of leadership to the next. The firm announced in January 2021 that Chairman and Chief Investment Officer Charles Pohl will retire in June 2022, after adding associate CIO David Hoeft to support Pohl in January 2019. Hoeft’s work as Pohl’s understudy “should help him take up CIO duties without a hitch,” according to Morningstar.