Download Five-Year Ranking: Pimco Leads 10

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Five-Year Ranking: Pimco Leads
No. 2 in our one-year ranking, Pimco takes the top spot on both the five- and 10-year lists. T. Rowe Price remained in the top five, though slipped from No. 2.
Natixis doesn’t have a five-year tenure in our ranking.
Rank Family
Weighted
Score
Rank Family
Weighted
Score
Rank Family
Weighted
Score
1. Pimco
78.39
19. Vanguard Group
61.12
37. Deutsche Asset & Wealth Mgmt
52.22
2. Hartford Funds
73.30
20. Victory Capital Management
60.94
38. Ivy Investment Management
51.51
3. Guggenheim Investments
72.93
21. Fidelity Management & Research
59.99
39. BNY Mellon/Dreyfus
51.10
4. T. Rowe Price
71.40
22. Goldman Sachs Asset Management
59.51
40. Affiliated Managers Group
50.98
5. Putnam Investment Management
70.24
23. Principal Management
58.69
41. Franklin Templeton Investments
50.35
6. American Funds
67.97
24. Columbia Threadneedle Investments 58.57
42. UBS Asset Management
49.21
7. Dimensional Fund Advisors
67.80
25. Eaton Vance
58.22
43. MainStay Funds
48.83
8. Thrivent Financial
67.10
26. USAA Asset Management
57.96
44. American Century Invst Mgmt
48.14
9. MFS Investment Management
67.04
27. BlackRock
57.86
45. Nationwide Fund Advisors
46.95
10. Lord Abbett
66.37
28. State Street Bank & Trust
57.82
46. Virtus Investment Partners
46.67
11. PNC Funds
65.64
29. Charles Schwab Investment Mgmt
57.72
47. Prudential Investments
45.82
12. John Hancock
64.96
30. RidgeWorth Funds
57.28
48. Wells Fargo Funds Management
44.61
13. Invesco
64.54
31. AllianceBernstein
56.96
49. Foresters Investment Management
43.85
14. TIAA
64.12
32. Northern Trust Investments
55.29
50. Russell Investments
43.00
15. J.P. Morgan Asset Management
63.72
33. Delaware Management
54.92
51. Waddell & Reed Investment Mgmt
39.86
16. Nuveen Fund Advisors
63.04
34. Pioneer Investment Management
54.76
52. State Farm Investment Mgmt
28.05
17. Legg Mason
61.75
35. Federated Investors
53.04
53. AssetMark
21.41
18. OppenheimerFunds
61.49
36. SEI Investments
52.70
54. Manning & Napier Advisors
21.27
10-Year Ranking: Pimco Again, Plus Strong Showings from MFS
The 10-year ranking shows more consistency; Pimco was No. 1 last year, as well, and MFS was No. 2. AMG slipped just two spots, making room for littleknown RidgeWorth Funds, which oversees $40 billion. Manning & Napier holds steady at the bottom on both our five- and 10-year lists, as it did last year.
Rank Family
Weighted
Score
Rank Family
Weighted
Score
Rank Family
Weighted
Score
1. Pimco
86.92
19. Lord Abbett
61.97
37. BNY Mellon/Dreyfus
51.86
2. MFS Investment Management
79.91
20. Franklin Templeton Investments
61.02
38. Thrivent Financial
51.62
All told, just 61 asset managers out of a
3. Ivy Investment Management
76.67
21. American Funds
60.94
39. Goldman Sachs Asset Management
51.07
total of 883 in Lipper’s database had the
diversified menu of equity and fixed-income
funds to meet the criteria for this ranking.
As in the past, there are several notable
fund shops that don’t make this list, including the $197 billion Janus Capital Group
(JNS), which doesn’t have a municipal-bond
fund, small-company stock specialist Baron
Funds, which doesn’t offer fixed-income
funds, and Dodge & Cox, which doesn’t have
a tax-exempt bond fund.
This year, six funds dropped off the list.
In July, SSGA acquired GE Asset Management, and in December, Eaton Vance (EV)
acquired Calvert Investments. Four other
families—Frost, Madison, Schroder, and
Thornburg—no longer meet the minimum
portfolio requirements.
Among the largest fund complexes, Vanguard Group guided its $3.5 trillion in total
assets under management through another
4. RidgeWorth Funds
76.60
22. Hartford Funds
60.17
40. OppenheimerFunds
50.61
5. Affiliated Managers Group
74.42
23. MainStay Funds
59.92
41. Putnam Investment Management
50.36
6. J.P. MorganAsset Management
74.25
24. Fidelity Management & Research
59.43
42. Foresters Investment Management
50.19
7. T. Rowe Price
73.19
25. Eaton Vance
59.12
43. Northern Trust Investments
49.86
8. John Hancock
72.80
26. Dimensional Fund Advisors
58.03
44. USAA Asset Management
47.60
9. Vanguard Group
71.84
27. Virtus Investment Partners
57.68
45. Pioneer Investment Management
47.57
10. Invesco
69.78
28. Principal Management
57.60
46. Federated Investors
45.59
11. Nuveen Fund Advisors
68.19
29. American Century Investment Mgmt
57.35
47. Nationwide Fund Advisors
45.04
12. Wells Fargo Funds Management
67.78
30. State Street Bank & Trust
57.25
48. UBS Asset Management
42.94
13. Waddell & Reed Investment Mgmt
67.31
31. Charles Schwab Investment Mgmt
56.84
49. Russell Investments
39.64
14. Delaware Management
67.01
32. Legg Mason
55.91
50. State Farm Investment Mgmt
39.13
15. Columbia Threadneedle Investments 65.02
33. PNC Funds
54.45
51. SEI Investments
38.05
16. Prudential Investments
63.58
34. Guggenheim Investments
53.59
52. Deutsche Asset & Wealth Mgmt
37.44
17. BlackRock
62.58
35. Victory Capital Management
53.13
53. Manning & Napier Advisors
30.36
18. TIAA
62.55
36. AllianceBernstein
53.12
February 13, 2017
got there,” he adds, referring not to his
home team’s Super Bowl victory, but to the
Standard & Poor’s 500 index’s own late-inthe-game rally to end 2016 up nearly 12%.
As for Natixis’ own swift move to the
front of this year’s ranking, “what hindered
our performance in 2015 is what helped us
in 2016,” says Hailer, who oversees a collection of more than 25 affiliated asset managers running $897 billion globally.
Case in point: The firm’s largest fund, the
$27 billion Oakmark International (ticker:
OAKIX), beat 97% of its Lipper peers last
year, posting a 7.9% return, adjusted for
12b-1 marketing and distribution fees. Herro
proved his patience with deep value when he
built a hefty stake in financials, consumer
cyclicals, and industrial stocks at a time
when investors had left them for dead. This
was also the case for Switzerland-based
mega-miner Glencore (GLEN.UK), which
was the fund’s biggest laggard in 2015—but
ended 2016 up more than 200%. Another top
holding,
France’s
BNP
Paribas
(BNP.France), enjoyed a similar turn of fate.
After closing in October 2013, the fund reopened to new investors last summer.
It was a similar turnaround for the
second-largest Natixis family fund, the
$17 billion Oakmark fund (OAKMX). Led
by value veteran Nygren, the fund outdid
99% of its Lipper peers in 2016 thanks to its
allocation to financials and choice calls in
energy—including Apache (APA), up 43%
last year—and industrials, such as Cummins (CMI), and Caterpillar (CAT).
Another heavy hitter and contributor to
Natixis’ overall ranking was Boston-based
Loomis Sayles. After trailing their peers in
2015, the $13.8 billion Loomis Sayles Bond
fund (LSBRX) and the $10.7 billion Loomis
Sayles Strategic Income fund (NEFZX),
both co-managed by Dan Fuss, did well by
making out-of-benchmark allocations to such
areas as high yield, convertibles, and common stocks. Both funds ended 2016 up more
than 8%.
Because the Barron’s/Lipper Fund Families Ranking is asset-weighted, the results
are heavily influenced by the size and category of a firm’s best- and worst-performing
funds. That worked in favor of Minneapolisbased Sit Investment Associates in 2015—
when the firm took the No. 1 spot—but
worked against it in 2016. The main detractor is Sit’s largest fund, the $998 million Sit
Dividend Growth (SDVSX), which slid to
the lowest quartile of its Lipper peer group,
despite ending 2016 up more than 10%. We
would be remiss not to mention that the
fund’s 10-year track record is still very
solid, with a 7.7% average annual return.
The importance of long-term returns is a
BARRON’S
message that bond powerhouse Pimco has
long preached. The firm credits its macrodriven approach with helping it find opportunities throughout a tumultuous year—and
powering its move to the second-place slot
from 62nd place in 2015. “Looking back at
2016, the strategies that did the best were
ones that were able to take advantage of
volatility and dislocation around key
events,” says the firm’s chief investment officer, Dan Ivascyn.
Two standouts were the $73 billion
Pimco Income fund (PONAX), up 8.7%—
and co-managed by Ivascyn—and the
$18.4 billion Pimco All Asset fund
(PASAX), up 13.3%. While investors associate Pimco with the $76 billion Pimco Total
Return fund (PTTAX), its underwhelming
relative performance in 2016—up 2.6% but
behind 88% of its Lipper peers—is proof
that there’s more to the firm than its flagship fund. In fact, no one fund drove
Pimco’s overall ranking.
So much the better, says Emmanuel
Roman, who joined the Newport Beach,
Calif., firm as CEO last fall. A native of
France, Roman favors soccer over baseball,
but the latter sport’s analogies fit his philosophy for Pimco. “We like hitting singles,” he
says.
The results add up. Pimco’s five-year and
10-year weighted results are better than
any fund family that Barron’s tracks over
those periods. Although Pimco is best
known for bonds, it outranked all other fund
families on U.S. equity funds and world
equity funds, thanks to its partnership with
Research Affiliates, which sits across the
street from Pimco’s headquarters. The
firm’s founder and chairman, Rob Arnott,
manages the Pimco All Asset fund and is a
pioneer in fundamental indexing.
Long before smart beta was all the rage,
Arnott began looking at how to combine the
efficiency, discipline, and cost-effectiveness
of indexing with key tenets of investing,
such as price and quality. Last year, the $1.8
billion Pimco RAE Fundamental Plus
(PIXAX) ended the year up 19%, leading its
large-cap core Lipper category. The $1.5 billion Pimco RAE Fundamental Emerging
Markets (PEAFX) soared 32.5%.
Last year’s volatility and change in
leadership—both in politics and in markets—
was some affirmation for believers in active
management and smart beta. Yet for State
Street Global Advisors, or SSGA, the year’s
third-place finisher, passive paid off. In
2016, U.S. SPDR ETFs had their best year
in terms of inflows since 2008, with nearly
$50 billion in net new money. “There are an
awful lot of people who, to borrow from Al
Gore’s quote [of Upton Sinclair] in An
S7
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Zero Excuses.
KNOW
All Cap Insider
Sentiment Shares
Overall Morningstar Rating™
out of 371 Mid-Cap Blend funds as of 12/31/2016
based on risk adjusted return
Get started today. Call 877.437.9363 or go to direxioninvestments.com/KNOW
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P2BW044000-0-S00700-1--------XA Composite
February 13, 2017
Composite C M Y K
Inconvenient Truth, find it ‘difficult to get
a man to understand something if his salary
depends upon his not understanding it,’ ”
says Nick Good, co-head of SSGA’s Global
SPDR Business, which accounts for 21% of
its $2.4 trillion under management. “We
don’t have that concern because we’re in
both spaces.”
While our ranking excludes some notable
SPDR funds—including the original, the
$225 billion SPDR S&P 500 (SPY)—the
firm’s strength across everything from
diversified ETFs to regional funds buoyed
its overall ranking from 28th last year.
To qualify for our fund-family ranking,
now in its 22nd year, firms must offer a
wide range of funds with a minimum track
record of one year. This includes at least
three mutual funds or ETFs in Lipper’s
general U.S. equity category, one in world
equity, and one in mixed-asset, as well as
two taxable bond funds and one tax-exempt
bond fund. Rankings are based on a firm’s
funds within those respective categories.
(See “How We Rank the Fund Families,”
page S5, for a more detailed explanation of
the methodology.)
Early in the rankings, Barron’s editors
opted to exclude S&P 500 index funds,
which, at the time, were by far the most
prevalent kind and represented the primary
form of indexing. We’ve continued to keep
them out of the ranking, but as indexing has
evolved, fund families have added new index
products that look less and less like the
broad market and represent some “active”
decision-making in their development. So we
have included them, inasmuch as they fit
into our primary categories. Of the 15,828
distinct share classes that collectively
contributed to this ranking, 138 are ETFs.
BARRON’S
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