Morningstar Advisor - February/March 2013 - (Page 48)

Morningstar Conversation The Epitome of an Active Manager By Shannon Zimmerman With conviction and creativity, Oakmark’s Bill Nygren invests in any company that he views as a bargain—even Apple. Renowned value investor Bill Nygren manages three funds and roughly $11.8 billion for Chicago-based Oakmark Funds. Nygren joined Oakmark’s parent organization, Harris Associates, in 1983, and he is a key architect of the absolute-value strategy that drives stock-selection at the firm. For Nygren, any company, irrespective of the sector in which it resides or its relative valuation profile, can be a bargain if the firm’s share price implies a steep enough discount to an estimate of its true worth. Oakmark’s 48 Morningstar Advisor February/March 2013 valuation work is stringent, too, with the shop’s managers typically requiring a discount of at least 40% before adding a company to a portfolio. technology and consumer discretionary sectors—areas of the market more traditionally associated with growth—accounted for more than 40% of assets. As executed by Nygren, Oakmark’s straightforward approach has generated some unusual portfolios. In December, two of this value manager’s funds—Oakmark Fund OAKMX and its concentrated sibling, Oakmark Select OAKLX—tilted toward the growth square of the Morningstar Equity Style Box. In Oakmark Fund, companies from the As that allocation suggests, Nygren is a highly active manager. Just 22% of Oakmark’s assets overlapped with the Russell 1000, the large-blend category index. Only 4.5% of Oakmark Select’s assets aligned with the index’s exposures. Nygren is also a highly successful manager. Both of his domesticequity charges have earned Morningstar

Table of Contents for the Digital Edition of Morningstar Advisor - February/March 2013

Morningstar Advisor - February/March 2013
Letter From the Editor
Social Media, the Old- Fashioned Way
Do You Use Active Strategies?
Youth Appeal
How to Buy the Unloved 2013
Morningstar Managers of the Year
Investments á la Carte
Investment Briefs
Approaches to Absolute-Return Investing
In Agriculture, It’s Good to Be Strong
Yes, There Are Good Active Funds
The Decoupling
Where It Could Pay to Be Active
The Active Fund That Defies Obsolescence
The Epitome of an Active Manager
Lines of Communication
The Existence of Market Timing ‘Intelligence’
A Route to Commodities that Bypasses the Futures Market
Best Positioned for Health-Care Reform
Diversified Stock Funds That Earn Their Stars
Our Favorite Mutual Funds
50 Most-Popular Equity ETFs
Undervalued Stocks With Wide Moats
A Twisted Debate

Morningstar Advisor - February/March 2013