A highly elaborate research operation, not superstar managers, is the secret to success at Manning & Napier -- which may be one reason this little-known fund hasn't gotten the attention its record merits: It boasts an annualized ten-year return of 14%; its five-year figure is close to 24%.
At the employee-owned company's headquarters outside Rochester, N.Y., some 35 analysts and associates are divided into five sector-focused teams and two macroeconomic ones. Rather than be bound to one specific style, the sector groups hunt for stocks that fit any of three strategies: one based on long-term growth prospects, another centered on appealing value characteristics, and a third taking advantage of cyclical opportunities for quick profits. The macroeconomic teams, meanwhile, provide data and forecasts that help direct the stock analysts or add insight to their picks. The heads of each team form a seven-man senior research group that makes the final calls to buy and sell.
The $836 million fund owns some 60 stocks, ranging from global Goliaths like Nestlé and HSBC to Swiss dental-implant maker Nobel Biocare. Recent positions include German electronics and electrical engineering giant Siemens, which stands to benefit from efforts to improve the electrical infrastructure in the U.S. and elsewhere.
"There's a decade-long secular story of growth there as the world upgrades networks," says Marc Tommasi, Manning & Napier's managing director of global strategies, adding, "The volatility in the markets recently has offered us a good buying point."