Survey Ranks Fund Managers

T. Rowe Price Associates Inc. was the leading manager of diversified U.S. stock mutual funds over the past three years, according to an industry report.

OppenheimerFunds Inc. ranked as the top manager of international stock funds, and Miller Anderson & Sherrard made the list as the No. 1 manager of taxable bond funds, according to researchers at Morningstar Inc. USAA Investment Management Co. was selected as the best manager of municipal bond funds.

The bottom performers were Smith Barney Inc. in the domestic stock fund category; Dean Witter Reynolds in the international equity fund group; Dean Witter in the taxable bond fund group; and Eaton Vance Corp. in the municipal bond fund group.

“We hope this survey will get people thinking both about the good families and the bad ones,” said Peter Di Teresa, a Morningstar analyst.

The survey by Chicago-based Morningstar included the 20 biggest firms in terms of assets under management in each of the four investment categories. Morningstar first gauged how the companies’ funds did in the three-year period ended Jan. 31.

The fund companies were then ranked in accordance with how their funds performed. The rankings also took into account the risk level of the portfolios; the funds that took the most risks required higher returns to place well in the survey, Di Teresa said.

It was the risk analysis that helped T. Rowe Price do so well in the survey for a second consecutive year. Most of the company’s equity funds lagged the competition in the first nine months of last year and did better in the “tough” fourth quarter, when the stock market struggled amid concern about Asia’s economic woes, Di Teresa said.

“T. Rowe Price did well because the company’s funds tend to be less risky than those of their competitors,” Di Teresa said. T. Rowe Price managers tend to invest less in technology stocks and also don’t like to overpay for the stocks they buy.

T. Rowe Price’s best-performing diversified U.S. stock fund of the past three years was the T. Rowe Price Value Fund, which rose at an annual rate of 31.8 percent, according to Bloomberg Fund Performance. The Standard & Poor’s 500 Index rose at an annual clip of 31.7 percent in the same period.