Mutual Fund Talk

2006 Morningstar Fund Managers of the Year

Morningstar announced its 2006 award of Fund Managers of the Year. The report also includes some good fund picks too.

Domestic Equity: O. Mason Hawkins and Staley Cates
Longleaf Partners Fund (LLPFX), Longleaf Partners Small-Cap (LLSCX)

In his latest Analyst Report for Longleaf Partners, Gregg Wolper reports that "smarts, guts, and patience" sent that fund to the top of the charts in 2006. Those characteristics have also marked the whole of Staley Cates and Mason Hawkins' remarkable tenure here. The pair are value managers in the Buffett mold, seeking companies that are trading at a discount of 40% or more to their estimates of intrinsic worth.

International Equity: David Herro
Oakmark International (OAKIX), Oakmark International Small Cap (OAKEX)

Just like Hawkins and Cates, David Herro is a value maven who looks for budget-priced stocks trading at a big discount to what he thinks they're worth. Herro's valuation-consciousness moderates the fund's downside, but the funds he manages are far from meek. He runs a relatively compact portfolio of names, isn't afraid to load up on individual sectors and countries, and is more comfortable pursuing emerging-markets bargains than most of his peers are. More often than not, that bold approach has paid off.

Bond: Jeffrey Gundlach
TCW Total Return Bond (TGLMX)
The Total Return Bond manager most investors think of, Bill Gross, has walked away with our fixed-income honors twice. But we think TCW's Jeff Gundlach is equally worth having on your radar. Despite the broad-ranging approach implied by this fund's moniker, Gundlach focuses almost entirely on mortgage-backed securities for this fund and has emerged as one of that sector's pre-eminent experts.