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Rating:WSJ Looks at the Biggest Wealth Creators and Destroyers among Fund Firms Not Rated 0.0 Email Routing List Email & Route  Print Print
Wednesday, March 3, 2010

WSJ Looks at the Biggest Wealth Creators and Destroyers among Fund Firms

by: Daniel Tovrov

Wednesday's Fund Track column in the Wall Street Journal takes a look at the biggest "wealth destroyers" and "wealth creators" in the mutual fund industry over the past decade.

Using research of a recent Morningstar report, between 2000 and 2009, Janus Capital was the worst destroyer, with a 10-year asset-weighted total return of negative one percent a year, meaning a loss of $58.4 billion.

"We're not pleased with Janus's performance in 2000 and 2001, but we've made lots of investments in our analysts, and added risk management, in the last eight years," Jonathan Coleman, co-chief investment officer at Janus, told The Journal. "We have been delivering consistent performance and will do so going forward, though there were times in the past when we didn't deliver that."

Janus is rebounding healthily, and the company ranked second of all large fund firms in terms of improvement for asset-weighted average ranks between 2006 and 2009.

"Maybe the most impressive thing is that Janus has rebounded so strongly from scandal and a horrific performance in the previous bear market," Morningstar director of fund research Russel Kinnel commented in the story.

Other large "destroyers" included Putnam Investments, which lost $46.4 billion over the period; AllianceBernstein, which dropped $11.4 billion; and Invesco, with $10.1 billion in lost assets.

"Results were really influenced by what happened at the start of the decade, when investors rushed to tech and growth and then they crashed," Sonya Morris, editorial director at Morningstar, told The Journal.

On the flip side, the biggest "wealth creators" between 2000 and 2009 just happened to be the three largest fund firms, with American Funds, Vanguard Group and Fidelity Investments creating $191 billion, $189 billion and $153.1 billion, respectively.

The study looked at investment gains in terms of dollars, not percentages, making large firms more susceptible to the "destroyer" and "creator" labels. 

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