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Morningstar names Bill Gross of Pimco its bond mutual fund ‘manager of the decade’

Bond king Bill Gross of Newport Beach-based Pimco was named Tuesday by Morningstar Inc. its bond mutual fund “manager of the decade.”

The financial research firm also named Bruce Berkowitz, who heads the Miami-based Fairholme Fund, domestic stock fund manager of the decade. David Herro, chief of the Oakmark International and Oakmark International Small Cap funds in Chicago, got the nod as the decade’s top manager of foreign-stock funds.

Karen Dolan, director of fund analysis at Morningstar in Chicago, said the firm made its choices based partly on the managers’ above-average returns in the last 10 years, while also factoring in the size of the funds they managed and how well they managed risk.

Gross’ Pimco Total Return fund, at $204 billion in assets the largest mutual fund, gained 7.7% a year in the last decade, on average, compared with a return of 5.5% a year for its bond-fund category average.

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Dolan said Gross had “stayed ahead of the competition. . . . by making the right calls at the right times,” including on interest-rate turns.

Morningstar’s choice for domestic stock fund manager of the decade, Berkowitz, is a “value"-oriented investor who steered the $10-billion Fairholme Fund to returns averaging 13% a year for the 10 years, compared with a mere 0.01% for the average U.S. stock fund.

Herro, the foreign-stock-fund winner, also follows a “value” strategy. Oakmark International, with $4.3 billion in assets, earned 8.2% a year in the decade compared with a 3.2% average for its category; Oakmark International Small Cap, with $830 million in assets, gained 10.1% a year versus a category average of 6.1%.

tom.petruno@latimes.com


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