6 Top-Performing Funds Shining on Morningstar's Radar

Investors are often searching for the next big thing in the investment world, but it's not always easy to spot. That's why Morningstar's Manager Research team is constantly on the lookout for the most promising strategies and managers in the industry. In their latest list of overlooked or emerging fund managers and strategies, six new additions stand out as particularly compelling. Among them is the PGIM High Yield Exchange-Traded Fund, which boasts a unique team setup that facilitates quick decision-making. Another standout is the Dimensional Short-Duration Fixed Income ETF, which has garnered over $7 billion in assets since its inception in 2021.

These six strategies join a total of 52 funds on Morningstar's Prospects list, which is designed to identify the most promising emerging managers and strategies in the industry. The updated list reflects the Manager Research team's most recent analysis and research, and includes new additions, drops, and graduates from the team's coverage. The team's rigorous evaluation process takes into account the fund's management team, investment approach, and overall prospects for future success.

One of the newcomers to the list is the Great Lakes International Value Equity fund, managed by Raymond Wicklander and his team of three analysts. The fund's strategy is centered around finding stable, competitively advantaged companies trading at reasonable valuations, which has led to strong downside protection during market selloffs. Another newcomer is the Great Lakes Global Value fund, which seeks to identify undervalued securities with strong growth potential. With their collaborative approach and focus on rigorous bottom-up research, this team is well-positioned to continue delivering strong results.

Another standout on the list is the Ashmore Emerging Markets Equity EMFIX fund, which has impressed the Manager Research team with its strong performance since manager Dhiren Shah took over in 2017. The fund's approach is centered around a collaborative team structure, with Shah and his team working closely together to identify top-down insights and rigorously bottom-up research opportunities. This unique approach has resulted in some impressive returns, cementing its position as a top performer in the emerging markets space.

The Manager Research team also notes that the PGIM High Yield Bond ETF PHYL, launched in 2018, has proven its capabilities among its peers, with experienced managers and analysts working together to research securities. The fund's unique team setup is a key part of its edge, allowing for swift decision-making and a high degree of flexibility in its investment approach. The Dimensional Short-Duration Fixed Income ETF DFSD, meanwhile, has shown impressive resilience since its inception in 2021, with over $7 billion in assets under management.

The Manager Research team notes that while GMO Emerging Country Debt GMDFX, led by manager Tina Vandersteel since 2015, has been one of the top performers in the emerging markets bond category, it is still under the radar of many investors. This fund seeks to exploit pricing differences between benchmark-eligible bonds and adjacent instruments with similar sovereign risk, using a bottom-up research approach to identify undervalued securities.

The list also includes Intrepid Income ICMUX, which has posted top-decile results in its multisector bond category over the trailing 10-year period through June 2026. While the author or authors do not own shares in any securities mentioned in this article, investors should take careful note of these standout funds and consider adding them to their portfolios for their potential to deliver strong long-term returns.