European Bank Bets Crush Returns for Herro, Other Managers

David Herro, a Morningstar Inc. manager of the decade, Fidelity International’s Sanjeev Shah and Marc Halperin of Federated Investors Inc. beat 80 percent of rivals over five years. Then they bet on European banks.

The investments on lenders including BNP Paribas SA, Intesa Sanpaolo SpA and Lloyds Banking Group Plc have plunged the three managers into the bottom third of their peer-group rankings, according to data compiled by Bloomberg. Today’s European summit in Brussels may be critical to improving their returns.