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Morningstar FundInvestor
February 2
015
account or simply buy the fund’s underlying holdings
directly for their own accounts.
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.
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.
FPA Perennial
FPPFX
Eric Ende’s investment range rose from the
$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.
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