The queen moves on

Margie Patel, the biggest name among mutual fund managers at Pioneer Investments, has left the company.

Patel, long known here as the queen of the junk-bond fund world, gave her notice last week and was out the door by Friday. Neither Pioneer nor Patel would say where she is headed. "I'm taking a little time off and then expect to join another organization," she said from her home yesterday.

Patel managed two funds for Pioneer but was best known for running the $4.8 billion Pioneer High Yield fund. Her unusual investment style and strong performance in different kinds of markets made the Pioneer fund stand out.

"Margie Patel is a great manager," says Lawrence Jones , an analyst who follows the fund for Morningstar Inc. "I was pretty disappointed. It was a big loss; there's no question about that."

Patel, 57, joined Pioneer in 1999, when she was already running the high-yield fund. Then called Third Avenue High Yield , the fund was acquired by Pioneer shortly after it hired Patel. Her fund's assets at that time: $8.8 million.

The renamed Pioneer High Yield fund ranked among the top 2 percent of funds in its category during each of the next three years, according to Bloomberg News. The fund's annual returns have averaged 11.8 percent in the nearly eight years since Patel joined Pioneer.

That early track record, combined with a modest loss of 2.7 percent in 2002 and a gain of more than 32 percent in 2003, turned Patel and her fund into an investor money magnet. For three straight years beginning in 2001, net sales of Pioneer High Yield actually exceeded those of the entire company, possible because all of Pioneer's other funds combined returned more cash than they took in from investors. Patel's high-yield fund was Pioneer's runaway star sales attraction.

At times, Pioneer High Yield earned a good deal of its money by investing in convertible securities rather than actual junk bonds, an unusual but not unique strategy. More recently, Patel had redirected more of her fund into stocks. Equities represented more than 17 percent of assets at the end of 2006.

Her tendency to look for investments beyond junk bonds was opportunistic, but also reflected a different kind of investment objective. While many junk-bond managers chased yield alone, her fund's stated objective was the highest possible total return.

Results were not uniformly spectacular. Pioneer High Yield earned disappointing single-digit returns in 2004 and 2005 before returning 10.6 percent last year. The fund earned 3.9 percent through the first quarter of this year, performance that put it at the top of its class.

Pioneer said yesterday that it had turned over management of the high-yield fund to Andrew Feltus, who has run the Pioneer Global High Yield fund since its inception six years ago. Tracy Wright also was named a manager of Pioneer High Yield and a co-manager of the global fund. Timothy Horan was named to run Patel's other fund, Pioneer Equity Opportunity Fund.

The global high-yield fund managed by Feltus has turned in some spectacular numbers, earning 14.9 percent a year over the past five years. It ranks among the top 2 percent of funds in its category.

Jones noted the performance of the Pioneer Global High Yield fund but said he wants to see how Feltus manages through a greater variety of market conditions. "I'm really hesitant to pound the table for it until we see how he operates" in more difficult markets, he said.

Steven Syre is a Globe columnist. He can be reached at syre@globe.com.