THE TOP TEN FUND FAMILIES
The top companies in the asset management business have staying power as they have built strong foundations based on investor trust, incisive research capabilities, a global network and fair degree of consistency in their performance. Here is an overview of the industry leaders.
Fidelity Investments
Fidelity Management and Research Company (FMR Co) was established in 1946 to manage and advise one of America’s first mutual funds, the Fidelity Fund, founded in 1930. Today, Fidelity is a financial services powerhouse advising and managing finances of individual and institutional investors. With the passage of time, the company has undergone significant change in ownership. It is now more broad-based with the founding Johnson family and employees owning nearly 50% each.
The Fidelity family manages assets worth $891.3 billion, excluding money market assets. Its year-to-date returns have improved to 5.79% versus its 5-year trailing returns to April 30, 2010 at 5.37% (*). Its top ten holdings account for 7% of its assets while its annual portfolio turnover is less than 100%.
T Rowe Price
Thomas Rowe Price Jr established the firm in 1937 in Baltimore, Maryland, USA. It has offices in 12 countries and employs around 4800 associates. It is listed on the Nasdaq (ticker: TROW).
Its year-to-date returns have improved to 6.75% versus its 5-year trailing returns to April 30, 2010 at 6.64%. Its total assets under management, excluding money market assets, amounts to $287.9 billion. Its top ten holdings account for 5,8% of its assets and its annual portfolio turnover is less than 100%.
Vanguard
Vanguard is one of the world’s largest investment management companies and its Wellington Fund, which opened on July 1, 1929 just before the Great Depression, is the oldest balanced fund of the US. Headquartered in Valley Forge, Pennsylvania, Vanguard commenced operations as a new firm under the stewardship of John C Bogle on May 1, 1975. Its total assets under management, excluding money market assets, amounts to $1.2 trillion.
Its year-to-date returns improved to 5.20% against its 5-year trailing returns to April 30, 2010 of 5.16%. Its top ten holdings account for 6.6% of its assets and its portfolio turnover ratio is less than 100%.
Eaton Vance
Founded by Charles F Eaton Jr in 1924, the company treats the investment management business, in the words of its founder, as a “serious matter”. It has assets under management of $65.6 billion, excluding money market assets. Besides its expertise in fund management, the company also manages the real estate portfolio of over a dozen private equity funds. This portfolio, worth $4 billion, includes office buildings, warehouses and multi-family communities.
The year-to-date return of this fund family is 5.06% versus its 5-year trailing return to April 30, 2010 of 4.29%. Its top ten holdings account for 8.3% of its assets and its annual portfolio turnover is less than 100%.
Franklin Templeton Investments
Franklin Templeton Investments was founded by Rupert H Johnson Sr in 1947. In 1973, the company moved its headquarters from New York to San Mateo, California. It has several brands- Franklin, Templeton, Mutual Series, Bissett, Fiduciary Trust and Darby Overseas- offering investment solutions. Its stock is listed on the NYSE (ticker: BEN).
Its assets under management, excluding money market assets, amount to $317.5 billion. It year-to-date returns at 4.48% is below its 5-year trailing returns to April 30, 2010 at 5.60. Its top ten holdings account for 3.4% of its assets and its annual portfolio turnover is less than 100%.
BlackRock
Founded in 1988 as Blackstone Financial Management, its name changed to BlackRock in 1992. It merged with Barclays Global Investors on December 1, 2009. BlackRock is listed on NYSE (ticker:BLK). Merrill Lynch & Co, Inc (a wholly-owned subsidiary of Bank of America Corp), The PNC Financial Services Group, Inc and Barclays Plc own 34.1%, 24.6% and 19.8% respectively in BlackRock with the rest owned by institutional and individual investors including BlackRock employees.
Its assets under management, excluding money market assets, amount to $1.2 trillion. Its year-to-date returns is 4.12% and below its 5-year trailing returns to April 30, 2010 of 5.71%. Its top ten holdings account for 3.7% of its assets and its annual portfolio turnover is 131%.
J P Morgan
J P Morgan Asset Management services institutions and retail clients while ultra high net worth clients are under the Private Bank. High net worth clients come under Private Wealth Management.
Its assets under management total $1.5 trillion with presence at over 50 locations globally. It has more than 370 portfolio managers and 280 plus research analysts.
Its year-to-date returns at 4.49% is below its 5-year trailing returns to April 30, 2010 of 4.97%. Its top ten holdings account for 3.5% and its annual portfolio turnover is less than 100%.
Janus
Janus Capital Group (JCH) is based in Denver, Colorado. It was formed with the merger of Janus Capital Corporation into its parent company Stilwell Financial Inc. JCH comprises Janus Capital Management LLC, INTECH Investment Management LLC (INTECH), and Perkins Investment Management LLC. It is listed on NYSE (ticker: JNS).
Its assets under management, excluding money market assets, stand at $95.5 billion. Its year-to-date returns at 5.60% is below its 5-year trailing returns to April 30, 2010 of 7.7%. Its top ten holdings account for 15.7% and its annual portfolio turnover is less than 100%.
MFS
“We invented the mutual fund” is their tagline- the first mutual fund from the firm’s stable came in 1924 when it was known as the Massachusetts Investment Trust (MIT). MFS was established as a holding company in 1969. With more than 1600 employees worldwide, it manages more than 60 mutual funds.
Its year-to-date returns stand at 4.02% and is below its 5-year trailing returns to April 30, 2010 of 5.10%. Its total assets under management, excluding money market assets, stand at $82.8 billion. Its top ten holdings account for 7.9% of its assets and its annual portfolio turnover is less than 100%.
American Century Investments
It has been in the money management business since 1958. Started by James E Stowers Jr , the fund is headquartered in Kansas City, Missouri with offices in New York, California, London, England and Hong Kong.
Total assets under management, excluding money market assets, stand at $82.8 billion. Its year-to-date return at 4.02% is below its 5-year trailing returns of 5.10%. Its top ten holdings account for 7.9% of its assets and its annual portfolio turnover is less than 100%.
All the companies listed above have a long history, more than 25 years in business. Almost all of them have demonstrated abilities to innovate, set performance benchmarks for others and have set standards in customer service and ethical conduct of business for new entrants to emulate.
Source:
*Morningstar.com
Fund company websites