(PUB) Investing 2015

February 2 015

Morningstar FundInvestor

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account or simply buy the fund’s underlying holdings directly for their own accounts.

PIMCO Total Return PTTRX Speaking of messy divorces, Mihir Worah and Scott Mather quickly invested more than $1 million in this fund after they became managers in the wake of Bill Gross’ departure. FMI Large Cap FMIHX Thirteen years into his tenure, Patrick English has finally topped the $1 million investment level in this fund. He also has more than $1 million in FMI Common Stock FMIMX . Arbitrage Fund ARBFX John Orrico crossed the $1 million threshold in this fund, which has a Morningstar Analyst Rating of Bronze. Fidelity Worldwide FWWFX William Kennedy boosted his investment to more than $1 million in this 4 -star fund. Fidelity Select Energy FSENX John Dowd raised his investment level to more than $1 million. As I noted earlier, that’s pretty unusual for a sector-fund manager. $500 , 000 – $1 million range to more than $1 million. It’s possible that this was simply due to appreciation, as it was a move of just one investment level, but it is a good sign in any case. Fidelity Trend FTRNX , Fidelity New Millennium FMILX , and Fidelity Value FDVLX Also moving from the second rung to the top rung were Matthew Friedman of Fidelity Value, John Roth of Fidelity New Millennium, and Daniel Kelley of Fidelity Trend. œ FPA Perennial FPPFX Eric Ende’s investment range rose from the

In addition, manager investment tells us that a manager has aligned his interests with shareholders’. Those with high investment levels likely believe strongly in the strategy and people in place. On the other hand, those who view their fund simply as a product to be sold may not be as likely to invest in a meaningful way. Manager investment can also be an effect of success. Successful fund managers are likely to be paid more and therefore invest that money in their funds. To the degree those managers continue to succeed, the investment level will have predictive power. In fact, we’re seeing more bonuses paid in fund shares, which furthers this effect. Funds in Which Managers Are Investing More In all, 36 managers of Morningstar 500 funds moved into the top investment level in 2014 . Let’s take a look at those where there were no other managers at the fund already in the top level. Meridian Growth MERDX Chad Meade and Brian Schaub joined Arrowpoint in 2013 and quickly invested in the Meridian fund that they took over in September 2013 . Given their success at Janus Triton JATTX , this is a fund to watch. AMG Yacktman YACKX This fund’s trio of managers, Stephen Yacktman, Donald Yacktman, and Jason Subotky, went from nothing invested to more than $1 million in 2014 . TCW Total Return Bond TGLMX Comanager Tad Rivelle is the first past the $1 million threshold, as Mitch Flack and Bryan Whalen have $100 , 001 – $500 , 000 in the fund. The three came on board when TCW bought MetWest to take over in the wake of its messy divorce from Jeffrey Gundlach.