Dodge & Cox International Stock: Steady Excellence

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

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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.

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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. 31Fund 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.

Andrew Tanzer
Contributing Writer, Kiplinger's Personal Finance

Andrew Tanzer is an editorial consultant and investment writer. After working as a journalist for 25 years at magazines that included Forbes and Kiplinger’s Personal Finance, he served as a senior research analyst and investment writer at a leading New York-based financial advisor. Andrew currently writes for several large hedge and mutual funds, private wealth advisors, and a major bank. He earned a BA in East Asian Studies from Wesleyan University, an MS in Journalism from the Columbia Graduate School of Journalism, and holds both CFA and CFP® designations.