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Kathy Panagopouloskathy.panagopoulos@morningstar.com
Morningstar Announces Fund Managers of the Year for 2001 -- In Tough Times, Fund Managers Earn Their Keep

CHICAGO, Jan 04, 2002 – Morningstar, Inc., a leading provider of investment information and analytical tools, today announced its Fund Manager of Year Award winners for 2001, recognizing outstanding portfolio managers in three categories: Domestic stock, international stock, and fixed income.

  • Domestic Stock Fund Manager of the Year: William C. Nygren
    Oakmark Select (OAKLX)
  • International Stock Fund Managers of the Year: Jean-Marie Eveillard and Charles de Vaulx
    First Eagle SoGen Global (SGENX)
  • Fixed-Income Manager of the Year: Robert L. Rodriguez
    FPA New Income (FPNIX)

Russ Kinnel, director of fund analysis for Morningstar, said, "Three clear themes emerge from the winning fund managers: All three winners are value managers who search for heavily discounted securities, are extremely candid with their shareholders, and they are all experienced hands who did a tremendous job managing the tumultuous market of 2001."

Domestic Stock Fund Manager of the Year:
William C. Nygren
Oakmark Select

It's hard to believe Bill Nygren could beat his performance in 2000, but he did. In 2001 he beat the SandP 500 index by 38 percentage points and his average peer by nearly 19 percentage points, more than almost any other manager. During the last five years, Nygren's Oakmark Select has returned 27 percent per year, compared with 16 percent for the SandP 500. His successful stock picks have included HandR Block, Tricon Restaurants, and Office Depot.

Nygren has scored with both typical and non-traditional value picks. Some of his successes from Oakmark Select's early days were with true-blue value stocks such as First USA and McDonnell Douglas: both companies were eventually acquired by other firms at huge premiums to the price Nygren paid for them. While he looks for companies that are trading for 60 percent or less of what an informed buyer would pay, he has exhibited more flexibility than the typical value hound. For example, he scored an enormous gain in 1998 with a bet on biotech giant Amgen and later with holdings in cable stocks such as MediaOne.

"Nygren also triumphs because he's shareholder friendly," Kinnel said. "He has tried to minimize taxable distributions, so shareholders have been able to hold on to nearly all of the fund's gains without giving Uncle Sam a cut. If someone tells you that tax management is gimmicky or costs too much in pretax returns, show them Oakmark Select's record and ask them to get back to you."

International Stock Fund Managers of the Year:
Jean-Marie Eveillard and Charles de Vaulx
First Eagle SoGen Global

Few managers are as focused on capital preservation as Jean-Marie Eveillard and Charles de Vaulx. They only buy stocks with solid downside protection, and if they can't find any that qualify, they'll hold cash or bonds. While the fund missed the 1999 stock-market rally, First Eagle SoGen Global returned 10.21 percent in 2001, even as nearly every other international fund was in the red, and it returned 9.7 percent in 2000.

The fund's long-term record is equally impressive: Eveillard and de Vaulx have whipped their peers during the trailing five- and 10-year periods. Their experience is also noteworthy. Eveillard has been with First Eagle SoGen Global since 1979, and de Vaulx has been with the fund since 1987.

"When the sky is falling, these are among the best investors to manage your money," Kinnel said. "They're picky investors who only buy dirt-cheap companies in order to avoid price risk. Many of their picks are so cheap that they get bought by other companies – causing many of the holdings to rise sharply in price."

Fixed-Income Manager of the Year:
Robert L. Rodriguez
FPA New Income

Bob Rodriguez hates to lose money. In his 17 years at the helm of FPA New Income, he hasn't finished a single year in the red. In 1994, when bonds got crushed, he still came through with a 1.4 percent gain. That year, he also received the Morningstar Fund Manager of the Year Award. (He's only the second manager to win the award twice; the first was Bill Gross of PIMCO.) The fund returned 12.33 percent in 2001, while the average intermediate-term bond fund was up 7.28 percent. The fund's returns rank in the top echelons of the intermediate-term bond category during the trailing one- to 10-year periods.

Rodriguez makes bold moves, yet guards against risks with a passion. His choices are usually designed to increase the safety level of the fund. To guard against rising rates, he buys inflation-protected bonds and maintains a moderate level of interest-rate sensitivity. To avoid defaults, he sticks with mostly high-quality debt and he's picky about what he buys.

"We seriously considered him for the 2001 Domestic Stock Manager of the Year honors, too, thanks to his 32 percent return at FPA Capital," Kinnel said.

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. Not only have they had a great year, but they also have a record of delivering outstanding long-term performance to shareholders and of aligning their interests with shareholders. The Morningstar Fund Manager of the Year Award winners are chosen based upon Morningstar's own research and in-depth evaluation by its senior editorial staff.

For the complete story, go to:
http://news.morningstar.com/doc/article/0,1,11729,00.html

For a list of past and present winners, go to:
http://corporate.morningstar.com/FMOYhalloffame

About Morningstar, Inc.
Morningstar, Inc. is a leading provider of investment information and analytical tools. The company provides financial data, research, online advice, consulting services and investment solutions for individuals, financial advisors, institutions, and the media worldwide. Morningstar is a trusted source of investment information and analysis for stocks, mutual funds, exchange-traded funds, closed-end funds, and variable annuities. Morningstar employs 800 people in the United States, Canada, Japan, Europe, Australia, New Zealand, and Asia. The company tracks nearly 100,000 investment products worldwide.

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©2002 Morningstar, Inc. All rights reserved
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