Dodge & Cox Sticks with Its Strategy

Despite a few recent hard years at Dodge & Cox, the Kiplinger 25 funds' managers remain confident in their long-term approach.

The past year was a tough one for Dodge & Cox, the venerable San Francisco money manager known for its consistent, bargain-priced approach to picking stocks. Two Dodge & Cox funds -- Stock (symbol DODGX) and International Stock (DODFX) -- were in the bottom 25% of their categories in 2011 through December 12. Barring a miraculous turnaround between now and December 31, this will be the fourth year out of five in which Stock, the firm's flagship, with some $37 billion in assets, has trailed Standard & Poor's 500-stock index. (Both Stock and International Stock, as well as Dodge & Cox Income -- DODIX -- a bond fund, are members of the Kiplinger 25.)

To find out what, if anything, the firm is doing to turn around the funds, Kiplinger's paid a visit to Charles Pohl, Dodge & Cox's co-president and chief investment officer. Pohl, a 28-year Dodge & Cox veteran, sits on the committees that run all of the firm's funds. What follows is an edited transcript of our conversation.

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Manuel Schiffres
Executive Editor, Kiplinger's Personal Finance