Fund Watch

Dodge & Cox International Stock: Steady Excellence

The newest offering from this fund stalwart could help you build up your foreign holdings.

By Andrew Tanzer, Senior Associate Editor, Kiplinger's Personal Finance

January 22, 2007

Editor's note: This is part of a continuing series of articles looking at the 20 biggest no-load stock funds.

Fund management the Dodge & Cox way means subjecting portfolio companies and candidates to intensive, exhaustive research. When the San Francisco firm's analysts and fund managers studied U.S. corporations in the 1990s, they noticed that a growing share of their earnings was coming from abroad as a result of a globalizing world economy. So they began to spend time studying foreign companies to better understand their U.S. rivals. Out of this grew Dodge & Cox International Stock, launched in 2001.

This fund has been a roaring success. Dodge & Cox International has ranked within the top 30% of its international category in each of the past five years, gaining 21% annualized during that period, an average of seven percentage points per year ahead of its peers. International bears the hallmarks of the other Dodge & Cox funds: solid results, modest portfolio turnover and low fund expenses.

What you get with Dodge & Cox International is a nicely diversified fund containing some of the world's best businesses; for example, HSBC Holdings, Nokia, GlaxoSmithKline and Hitachi are among the fund's top ten positions. And here's the best news: unlike Dodge & Cox Stock and Balanced funds, International is still open to new investors.

Foreign stocks or funds should probably account for at least 20% to 25% of your stock exposure. If you're below that benchmark, Dodge & Cox International makes a fine addition. The fund, along with Dodge & Cox Income, is a member of the Kiplinger 25. We rate the fund a BUY.

For more information, read an interview with Dodge & Cox veterans John Gunn and Diana Strandberg. And see The World's Three Best Funds.

FUND FACTS

Dodge & Cox Stock (DODFX) Assets: $28.5 billion Manager (year started): team (2001) Returns (vs. MSCI EAFE Index)* 2006: 28% (26.3%) Three years annualized: 25.6% (19.9%) Five years annualized: 20.8% (14.5%) Expense ratio: 0.67% Portfolio turnover: 7% Initial minimum investment: $2,500 Phone: 800-621-3979 Web site: www.dodgeandcox.com *Returns through Dec. 31 Fund Fact sources: Standard & Poor's, Morningstar

View updated data for this fund and compare the performance of the 20 biggest no-load stock funds.

Go to A Close Look at the 20 Biggest No-Load Stock Funds.

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