Dodge & Cox Stock Loads Up On Drug Stocks

The managers of this Kiplinger 25 fund see good deals in the pharmaceutical sector.

The managers of Dodge & Cox Stock (symbol DODGX) think the market is wrong about drug stocks. In their view, investors are overly pessimistic about the group, and that has led to a large number of bargains. So they have loaded their fund, a member of the Kiplinger 25, with drug stocks.

Dodge & Cox’s long-term record suggests that the managers are more likely to be right than wrong. Despite a hiccup during the 2007-09 bear market, D&C Stock returned an annualized 5.2% over the past ten years (through July 26). That beat Standard & Poor’s 500-stock index and the typical large-company value fund by an average of 2.2 and 1.6 percentage points per year, respectively. Year to date, the fund has returned 5.8%, lagging the S&P 500 by 1.2 points and leading the average large value fund by 0.5 point.

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Bob Frick
Senior Editor, Kiplinger's Personal Finance