PIMCO CIO Bill Gross was chosen as Morningstars fixed-income fund manager of the year, the first manager to win the award three times. Mr. Gross, who also won in 1998 and 2000, anticipated the downturn in the housing market this year and avoided lower-rate subprime securities that plagued other bond funds in the past year, according to a Morningstar news release.
The award recognizes the strong returns of the $112.5 billion PIMCO Total Return Fund and the $2.9 billion Harbor Bond fund. For the three years ended Dec. 31, the Total Return fund delivered a 5.25% return, beating the Lehman Brothers Aggregate Bond Index by 0.46 percentage points. The Harbor Bond Fund returned 5.29% for the same period, topping the index by 0.5 percentage points.
Morningstar picked Hakan Castegren, president of Northern Cross Investments, and his four-person analyst team as international stock fund manager of the year based on the performance of the $27.1 billion Harbor International fund, confirmed Courtney Dobrow, Morningstar spokeswoman. The fund returned 24.64% for the three years ended Dec. 31, beating the MSCI EAFE index by 7.81 percentage points.
William Danoff, vice president and portfolio manager at Fidelity Investments, was chosen as best domestic stock fund manager, for the $80.9 billion Fidelity Contrafund and the $9.5 billion Fidelity Advisor New Insights Fund. The Contrafund returned an annualized 15.49% and the Fidelity Advisor Fund 16.4% for the three years ended Dec. 31. The Contrafund beat the S&P 500 by 7.39 percentage points and the Advisor fund topped the index by 8.3 percentage points over the same time period.
All fund returns are annualized.