From Morningstar: 2024-08-21 04:40:00

In the world of investments, executing a great strategy is key to success. Differences in implementation can lead to varied performance among funds, even if they follow similar strategies. Consistency is vital for investors to achieve their goals.

Even skilled managers can make mistakes. Morningstar analysts closely monitor managers who start slipping in executing their investment processes. This article highlights four funds, providing insight into the Morningstar Medalist Rating, which guides investors on analysts’ confidence in each strategy.

Parnassus Mid-Cap fund faced losses due to stock-selection misses, leading to a process rating downgrade. It typically invests in companies with economic moat ratings compared to its benchmark. However, the fund had high exposure to firms with no moat, resulting in losses. The addition of an experienced manager aims to mitigate risks but may impact downside protection.

Hartford MidCap fund managers made missteps in sectors like healthcare and technology, affecting performance. Poor stock selection and mishandling of certain stocks led to a people pillar rating downgrade. Despite changes in the investment team, the fund’s prospects remain uncertain.

Davis NY Venture fund struggled with poorly-timed sector exits and stock selections, impacting long-term prospects. Bold sector bets led to a people pillar rating downgrade, indicating challenges faced by the fund in delivering returns. Consistent execution is crucial for bold investment strategies like this one.

Alger Small Cap Focus fund experienced a decline in performance due to uncharacteristic short-term trades by the manager. Shifts in the portfolio towards healthcare and technology were observed, along with positions in speculative biotech stocks. The fund’s historical preference for proven businesses may be impacted by recent trading decisions.



Read more at Morningstar: These Four Fund Manager Mistakes Caught Our Attention