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Kathy Panagopouloskathy.panagopoulos@morningstar.com
Morningstar Announces 2004 Fund Manager of the Year Awards

CHICAGO, Jan. 03, 2005 – Facing an uncertain market in 2004, the best mutual fund managers demonstrated the kind of prowess, strategy and agility required to serve investors well. To recognize the best of these top performers, Morningstar, Inc., a leading provider of investment research, today announced its 2004 Fund Manager of the Year awards for portfolio managers in three categories: domestic stock, international stock, and fixed income.

  • Domestic-Stock Fund Manager of the Year:
    Brian Berghuis
    T. Rowe Price Mid-Cap Growth (RPMGX)
  • International-Stock Fund Manager of the Year:
    Bryan C. Cameron, Mario C. DiPrisco, Jacob M. Gofman, John A. Gunn, Gregory R. Serrurier, Diana S. Strandberg, and Kouji Yamada
    Dodge and Cox International Stock (DODFX)
  • Fixed-Income Fund Manager of the Year:
    Ken Leech and team
    Western Asset Core Bond (WATFX)

“2004 had a dismal beginning and strong ending,” said Kunal Kapoor, director of mutual fund analysis for Morningstar, Inc. “Many great fundamental managers posted stellar returns, making this year full of good candidates for our Fund Manager of the Year award. As always, we didn’t simply rely on short-term performance; we rewarded those who have demonstrated an ability to make money for investors during many different market cycles. We also picked managers who keep shareholders’ best interests in mind and have the courage to stand by their investing strategies regardless of whether they are in fashion.”

Domestic-Stock Fund Manager of the Year:
Brian Berghuis
T. Rowe Price Mid-Cap Growth (RPMGX)

Brian Berghuis has built an impressive record at T. Rowe Price Mid-Cap Growth since the fund’s launch in 1992. The fund returned more than 18 percent in 2004, and during the trailing 10 years, it has returned nearly an annualized 16 percent, placing in the top 5 percent of the mid-growth category.

Berghuis looks for companies with strong long-term growth potential, such as Nucor and BJ Services, but is careful to not overpay for them. He has consistently posted above-average returns and has shown an ability to manage the fund during down markets. Most recently, the fund rebounded solidly from the bear market, posting sound returns in 2003 and 2004. Berghuis has thus been able to produce five years of strong relative performance.

“Berghuis’ record is an indication of his stock-picking prowess,” Kapoor said. “He didn’t throw his investing discipline out the window to chase hot Internet stocks. Like other T. Rowe Price managers, he has done an excellent job of staying focused on fundamentals and risk. Moreover, he is a strong voice for corporate governance.”

International-Stock Fund Manager of the Year:
Bryan C. Cameron, Mario C. DiPrisco, Jacob M. Gofman, John A. Gunn, Gregory R. Serrurier, Diana S. Strandberg, and Kouji Yamada
Dodge and Cox International Stock (DODFX)

Unlike some firms, Dodge and Cox’s team of analysts compile their research on a global sector basis, so the same pool of analysts provides ideas for all the firm’s offerings. The results have been remarkable: In a little less than four years, the firm has become a force in the foreign-stock arena. The fund is still relatively young, but its 32 percent return in 2004 lands at its category's top, and its trailing three-year return of nearly 20 percent ranks in its group's top quintile.

The team looks for moderately priced stocks with strong management, and it is focused on the long term. For example, amid the negative news surrounding pharmaceutical stocks in 2004, the team added to positions in Bayer and GlaxoSmithKline, showing the conviction required to wade into a sector where few others are going.

“One of the key differences at Dodge and Cox is its extremely low fees,” Kapoor said. “Many fund companies pad their earnings by raising fees on foreign funds because the market will bear it. This firm charges only 0.82 percent, compared with a category average of 1.55 percent. With these high fees, investors have to ask themselves why they would pay more elsewhere. It wouldn’t be for expertise, because the Dodge and Cox managers have that in spades, and it is not honest shareholder communication and topnotch stewardship, because in those respects, you can’t improve much on Dodge and Cox.”

Fixed-Income Manager of the Year:
Ken Leech and team
Western Asset Core Bond (WATFX)

As one of the largest managers of bonds for institutions in the United States, Western Asset is not well known among individual investors. Yet, it has become one of the most formidable fixed-income firms around. A unit of Legg Mason, the firm has relied on considerable resources to post its impressive 10-year record on the Core Bond Fund. During that stretch, the fund placed in the intermediate bond fund category’s top 2 percent. This team was also a runner-up for Fixed-Income Manager of the Year in 2003.

Led by chief investment officer Ken Leech, the fund’s management team repositions the fund based on top-down analysis and consistently adds value by finding bonds that perform a little better than their credit ratings suggest. Although the fund has a high minimum investment of $1 million, investors can purchase it through some fund supermarkets in smaller increments.

“The top bond shops remain consistently dominant, and previous fixed-income winners continue to post outstanding returns year in and year out,” Kapoor said. “This year we recognize another great fund shop – Western Asset Management. Its flagship fund, the Core Bond Fund, was up 5 percent in 2004 and has posted outstanding returns for the long term. The fund has produced top-quartile returns in four of the past five years and above-average returns in seven of the past eight years.”

Runners-Up for 2004

Chris Davis and Ken Feinberg, co-managers of Selected American Shares (SLASX), were runners-up for the domestic-stock category. The Causeway International Value (CIVVX) team, composed of James Doyle, Harry Hartford, and Sarah Ketterer, were runners-up for the international-stock category. Dan Fuss, winner of the 1995 Fixed-Income Manager of the Year award, and Kathleen Gaffney, his co-manager at Loomis Sayles Bond (LSBRX), were runners-up in the bond category.

Established in 1988, the Morningstar Fund Manager of the Year award recognizes portfolio managers who demonstrate excellent investment skill and the courage to differ from the consensus to benefit investors. To qualify for the award, managers’ funds must have not only posted impressive returns for the year, but the managers also must have a record of delivering outstanding long-term performance and of aligning their interests with shareholders’. The Fund Manager of the Year award winners are chosen based on Morningstar’s proprietary research and in-depth evaluation by its senior analysts.

For the complete report, go to:

For a list of past and present winners, go to:

Calendar-year results for 2004 are based on preliminary data.

About Morningstar, Inc.
Morningstar, Inc. is a leading provider of independent investment research in the United States and in major international markets. The company offers an extensive line of Internet, software, and print-based products and services for individuals, financial advisors, and institutions. Morningstar tracks more than 100,000 investment offerings, including stocks, mutual funds, and similar vehicles. The company has operations in 16 countries.

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©2005 Morningstar, Inc. All rights reserved.

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