Active fund managers found their skills tested in 2018. Barron’s ranks the best-performing families of funds.
Let’s rewind the tape back to early 2018, when fund managers were betting on a rare moment: The world’s major economies were all expanding together. That, coupled with signs of strength across a range of asset classes, created what some described as the best investing environment of their entire careers.
Among the funds that moved the needle for the $1.6 trillion American Funds complex last year was the $134 billion American Balanced fund , a mixed-asset juggernaut. It declined nearly 2.5% but nevertheless outpaced 96% of its Lipper peers. The firm’s 10 largest funds all closed out 2018 with losses. var insetData_1099947=function {return {"uuid":"d68b5d96-067b-45f9-bd55-b9947ba16b69","slug":"0311-fundfam-tab1","headline":"The Best Fund Families of 2018","description":"This is the second year we’ve ranked the fund families purely on their actively managed funds—all of them. Though the stock market reached new highs in 2018, most markets ended the year down. The top firms were able to lose less than their peers.
var insetData_8581105=function {return {"uuid":"b5add2b0-4528-4a21-a682-7bc9ed34d8a7","slug":"0311-fundfam-usequity-best","headline":"U.S. Equity","description":"Mainstay was in the top five for U.S. Equity last year as well.
That diversity of opinion, he says, is precisely why this “system” of management works. The firm’s 36 distinct strategies are run by multiple managers, but they each have autonomy over the assets they oversee. This avoids the pitfalls of a star manager system, and generally leads to healthy returns. Low costs help; the average management fee of 0.35% is less than that of many passive funds. On that front, American Funds does not offer any passively managed funds or ETFs.
“We really like this idea of independently minded, entrepreneurial boutiques that have their own culture and ability to move quickly to meet the needs of clients,” Hung says. Talented asset managers shine in tough markets. “It’s also a period where innovative companies can improve their business positions,” says Tom Faust, CEO of No. 3-ranked Eaton Vance.
var insetData_1971087=function {return {"uuid":"7df4228f-c036-4a74-ad49-ced64239c3db","slug":"0311-fundfam-tenyear-table","headline":"10-Year Ranking","description":"The 2018 winner is No. 17 over 10 years.
That isn’t to say that Pimco has turned a blind eye to the ever-expanding corporate bond market. Just the opposite. The tremendous growth in issuance, he says, has prompted the firm to bolster its research in corporate credit, particularly outside the U.S., so it’s ready to act when dislocations give rise to deals.
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