Equity Funds Deliver 16.57% in 2010: Lipper
January 10, 2011
Equity funds delivered 16.57% in 2010, with more than one-third of the gains, 6.43%, coming in during the last five weeks of the year, Lipper said.
And in the final quarter of the year, U.S. domestic equity funds trumped international equity funds, returning 11.41% compared to world equity funds' 7.83% return. It was the first time in four quarters that U.S. domestic equity funds outshone world equity funds as well as two other broad macro-classification categories: sector equity funds, which rose 10.69% in the fourth quarter, and mixed equity funds, which delivered 6.14% in the quarter.
Further, for the third consecutive quarter, growth-oriented U.S. domestic equity funds outpaced the other styles, rising 13.21% in the fourth quarter. And it was the third quarter in four that small-cap funds beat other capitalization groups, with small-cap funds delivering 15.97% in the final quarter of the year.
Lipper noted that despite the Flash Crash in the middle of the year on May 6, equity funds have been in positive territory in the third and fourth quarters.
Morningstar Names Fund Managers of The Year
Morningstar announced its 2010 Fund Managers of the Year Wednesday. The awards are based not just on performance in 2010 by over the long term, as well as on fiduciary responsibility for investors' capital.
Bob Goldfarb and David Poppe of Sequoia, managers of the Sequoia Fund, were named Domestic Stock Fund Manager of the Year.
Brent Lynn, manager of the Janus Overseas Fund, is the International Stock Fund Manager of the Year.
And Michael Hasenstab of the Templeton Global Bond Fund is the Fixed Income Manager of the Year.
Morningstar said that the Sequoia Fund holds stocks for the long-term, seeking out companies with "top-quality management, rock-solid balance sheets and the ability to compound capital."
Karen Dolan, director of mutual fund analysis at Morningstar, noted: "Sequoia is one of the most deliberate and methodical funds out there in regards to changes in its portfolio, shown by its consistently low turnover. The fund's 2010 gains were not the result of savvy tactical moves or one knockout pick, but emerged from well-researched stocks that have long held a spot in the portfolio."
The fund gained 19.5% in 2010, compared to its benchmark's 14% return. Over the past 15 years, its annualized return is 9.7%.
Morningstar said that Lynn of the Janus Overseas Fund has been with the fund for 10 years and became lead manager in 2003. As the portfolio manager of the fund, he has delivered a 19% annualized gain. In 2010, the fund delivered 19.3%, beating its benchmark by four percentage points.
"Lynn's keen focus on growth and stock-specific research has led him to favor prospects in emerging markets, especially India, Brazil and China. Most remarkable, though, is just how well Lynn has managed those risks," Dolan said.
The Templeton Global Bond Fund has a 10-year annualized return of 11.7%, nearly double that of its category. In 2010, it returned 12.7%, placing it in the top quartile of the world bond category.
This is the eighth time in the past 10 calendar years since Hasenstab joined the Templeton Global Bond Fund that it has placed in the top quartile.
Quote of the Week
"We preserved cash [since the 2008 credit crisis]. Now weâ€™re turning around and feeling comfortable about our outlook and spending it."
- Jim Flaws
Chief Financial Officer