BOSTON ( TheStreet) -- Pimco bond baron Bill Gross reportedly said it was a mistake to sell Treasuries before a big rally this year. When a bond fund manager underperforms his or her benchmark index, "you go home at night and cry in your beer," Gross said.But unlike most of us, the likes of Gross and other mutual fund and hedge fund managers still earn millions of dollars a year despite their sometimes colossal miscalculations.
|John Paulson is one of several high-profile fund managers to get burned by choppy markets this year.|
Boston-based Ken Heebner is another well-known manager who's off to a poor year. Known as Big Foot for his outsized bets on particular stocks, the mutual fund manager oversees Capital Growth Management's $2.5 billion CGM Focus Fund ( CGMFX). Heebner's clients have been sent on a rollercoaster ride. The fund has sunk almost 20% this year. Even so, the CGM Focus Fund rocketed 80% in 2007 and 67% in 2003, contributing to a 10-year annualized return of 9%. The fund's top holding now is online travel service Priceline.com ( PCLN), at 6.6% of assets. Its shares are up 26% this year, prompting Heebner to sell part of his stake earlier in the year. Heebner has been trading at a furiously fast pace, which is typical for him, as his portfolio turnover rate during the first half of the year was the equivalent of a startling 554% on an annualized basis. That would mean the holdings turn over a total of six times in a year. But he has a huge bet on the consumer-cyclicals sector, and the fund's latest big addition is Herbalife ( HLF), at 6%. The nutritional and household products firm's shares are up 64% this year.