Fund Watch


Matrix Advisors Value Fund on the Mend

Anjelica Tan

After many lean years, this fund posts healthy gains.



When you’re a value investor, it pays to be patient. Consider David Katz, who has run Matrix Advisors Value since 1996. Recently, the fund has benefited from stocks, such as Charles Schwab and Teva Pharmaceutical, that Katz bought in 2011, when the market was in turmoil because of worries about Europe’s future. The picks have helped put Matrix in the top 2% of large-company value funds over the past year.

SEE ALSO: 8 Great Dividend Mutual Funds

Katz relies on computers as well as hands-on analysis to find bargains with attractive prospects. He starts by screening the 1,500 largest U.S.-traded companies for such measures as price relative to earnings and dividend yield. The computer kicks out a fair value for each firm. Katz considers any stock that trades for at least one-third less than that fair-value figure. About 75 to 100 names pass muster. Katz buys the 30 to 40 most-promising stocks. He sells when a stock reaches its fair value, or if he sees deterioration in the quality of a firm’s balance sheet or its earnings prospects.

Matrix’s long-term record has been erratic. After beating Standard & Poor’s 500-stock index each year from 1999 through 2003, the fund lagged the market in seven of the next nine years. But Katz believes the fund, which holds just $78 million in assets, is poised to continue its rebound. As long as investors focus on individual companies rather than big-picture issues, he says, such solid, well-priced holdings as Microsoft and JPMorgan Chase should do well.



Editor's Picks From Kiplinger


You can get valuable updates like Fund Watch from Kiplinger sent directly to your e-mail. Simply enter your e-mail address and click "sign up."

More Sponsored Links


DISCUSS

Permission to post your comment is assumed when you submit it. The name you provide will be used to identify your post, and NOT your e-mail address. We reserve the right to excerpt or edit any posted comments for clarity, appropriateness, civility, and relevance to the topic.
View our full privacy policy


Advertisement

Market Update

Advertisement

Featured Videos From Kiplinger