Three Large-Cap Stars in the Kiplinger 25
After a long period of hibernation, large-company stocks are springing to life again. In the year through May 21, Standard & Poor's 500-stock index vaulted 23%, nearly three times the index's annualized return over the past five years.
Three of the Kiplinger 25 large-company mutual funds managed to reach or clear that tall 23% bar, two of them members of the T. Rowe Price family. T. Rowe Price Equity Income (symbol PRFDX), managed by steady Brian Rogers, returned 25% over the past year. His largest holdings, as of March 31, were General Electric, JP Morgan Chase and AT&T. T. Rowe Price Growth Stock (PRGFX), piloted by the redoubtable Bob Smith, matched the S&P's performance. In the first quarter of this year, Smith quadrupled his fund's stake in CVS Caremark and added to large positions in UBS, AIG and Google.
The other large-cap champ was Dave Williams' Excelsior Value & Restructuring (UMBIX), which returned 25%. Williams' large bet on energy stocks (19% of portfolio holdings) such as ConocoPhillips and Brazil's Petrobras paid off. He also clearly likes industrials (18% of the fund), such as Black & Decker and Southern Copper. Year to date, this fund has returned an impressive 14%, clocking the S&P 500 by more than five percentage points.
The laggard among our large cap funds is Oakmark Select (OAKLX), which trails the S&P index by five percentage points over the past year. Bill Nygren's concentrated 20-stock portfolio has been held back by large positions in limping stocks such as Washington Mutual, Dell and Gap.