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Portfolio > Mutual Funds

Mutual Fund Families Dysfunctional in 2011

By John Sullivan

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For “Todd” Kennedy and “Nigel” Hussein, family name association is either a blessing or a curse. As SmartMoney notes, the truism holds for mutual fund families as well. The publication took a look at the overall performance of the 10 largest mutual fund companies by assets under management, and although “I have all my money with Fidelity” might impress the neighbors, it won’t do much for quarterly statements.

Sure, each company has the star manager they like to market, but what about their other funds?

“Family pedigree, it would appear, doesn’t count for much,” SmartMoney writes. “Indeed, only two of the 10 largest mutual fund clans–bond-focused PIMCO and Vanguard, known primarily for its benchmark-hugging index funds–managed to finish in the black for 2011. (PIMCO’s six dozen funds averaged a 3.6% return, despite Bill Gross’ admitted recent slipup.)”

The 10 mutual fund firms, as a group, posted returns of negative 1% during the period, the magazine notes while the as Standard & Poor’s 500 returned about 2% and the Dow Jones Industrial Average returned more than 8%.

“The gap between the best-performing firm (PIMCO) and the laggard (Dodge & Cox) wasn’t small. An investor staking $10,000 with the former firm’s funds would end up with $930 more than an investor who bet on the latter,” SmartMoney says.

While the piece adds that they aren’t exactly apples-to-apples, “Dodge & Cox’s stock market focus probably hurt it vis-à-vis PIMCO last year.” Even so, brand name doesn’t translate to brand returns, judging from the list.

  1. Vanguard, $1.4 trillion AUM, 1.5% 2011 return
  2. Fidelity Investments, $973 billion, -3.5%
  3. American Funds, $873 billion, -0.3%
  4. PIMCO, $497 billion, 3.6%
  5. T. Rowe Price,$349 billion, -1.4%
  6. Franklin Templeton, $348 billion, -1.1%
  7. John Hancock, $199 billion, -3.4%
  8. Columbia, $163 billion, -2.0%
  9. Oppenheimer, $143 billion, -1.1%
  10. Dodge & Cox, $113 billion, -5.7%

Source: Morningstar and SmartMoney

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