On Sunday, April 6, Jerry Palmieri, who had been at the helm of the Bronze-rated, $9.8 billion Franklin Growth (FKGRX) since 1965, died at age 85.
A resident of Jamestown, R.I., Palmieri was the first-ever recipient of Morningstar's Fund Manager of the Year award in 1987. He had been with Franklin Templeton since 1963 and was the longest-tenured manager in the large-growth Morningstar Category.
Born Vivian Jerry Palmieri in New York City, Palmieri graduated from Williams College in 1950 with an economics degree and then served in the U.S. Air Force during the Korean War.
Franklin Growth had been the only mutual fund that Palmieri had managed, and he put together an impressive track record over a long period of time. Although the fund hasn't had a history of leading in rising markets, it posted very solid long-term performance and provided investors with nice downside protection as well. The fund's 5.43% annualized return over the past 15 years easily topped the 3.93% annualized return of its primary benchmark, the S&P 500 Index as well as the 3.8% annualized return of its large-growth category average.
In 1987, Morningstar instituted its Fund Manager of the Year award and named Palmieri as the first, and sole, recipient that year. (Today, Morningstar names Fund Managers of the Year in the Domestic Stock, International Stock, Fixed Income, Alternatives, and Allocation categories.) Morningstar managing director Don Phillips, who was with the firm for the very first Fund Manager of the Year award, recalled that the award, aimed at recognizing managers' longer records and attention to risk instead of simply focusing on which manager had produced the highest returns of the year, was a fairly radical idea at the time. In tapping Palmieri, Phillips said, Morningstar was giving kudos both to his solid short-term performance and, more important, to his longer-term track record and ability to make money for his investors.
Palmieri and Franklin together had laid out a clear succession plan in 2008 when they tapped Serena Perin Vinton as Franklin Growth's designated successor. The fund also long has had added help from Conrad Herrmann, who has been a comanager of the fund since the start of 1992 in addition to serving as the lead manager of Bronze-rated Franklin Flex Cap Growth (FKCGX) since 1993. However, most of the stock-picking had been done by the duo of Palmieri and Vinton, and it will be interesting to see if Franklin eventually provides Vinton with some assistance on the fund.
The Morningstar Analyst Rating for Franklin Growth will remain Bronze.
Robert Goldsborough does not own shares in any of the securities mentioned above.