Kip 25

Primecap Odyssey Growth Is All Action, No Talk

The managers of this Kiplinger 25 fund prefer to stay out of the limelight.

The managers who run Primecap Odyssey Growth (POGRX)—a member of the Kiplinger 25—are some of the best stock pickers in the country. But you won't see them quoted in newspapers or talking on TV. They'd rather focus on their jobs than talk to the press. We can't complain. Over the past 12 months, Odyssey Growth shot past its peers (funds that invest in large, growing firms). It beat Standard & Poor's 500-stock index by 13.6 percentage points.

The fund hit the market's sweet spot, thanks to a 33% stake in technology stocks. Shares in graphics-chip maker Nvidia climbed 128% over the past 12 months. Memory- and storage-product maker Micron Technology gained 92%, and ASML Holding—which makes photolithography tools used to make smaller, next-generation semiconductor chips—rose 52%.

Odyssey Growth also has almost one-third of its assets invested in health care shares. Two standouts over the past year include medical-device makers Abiomed, which soared 134%, and Insulet, which increased 77%.

The fund's five comanagers invest in growing companies that trade at bargain prices. They look for a catalyst—the introduction of a new product, the arrival of a new executive or a corporate restructuring—that could push the stock higher. They are patient about waiting for a stock to turn around, and after it does, they typically hold for the long term. The fund's 5% turnover ratio—meaning that roughly 5% of holdings, on average, are replaced in a year's time—is a fraction of the typical 58% turnover ratio of its peers. Almost one-fifth of Odyssey Growth's 134 stocks have been in the portfolio since the fund opened in 2004, including drug companies Eli Lilly and Amgen.

Fund Updates

Investors who buy shares in Oakmark International for the first time must now buy directly from the firm. The fund is closed to new investors at most brokerage firms, including Fidelity and Schwab. If you already own shares, this news doesn't affect you. You can still buy shares through your brokerage firm or directly from Oakmark.

Pimco Income's D shares become A shares at the end of March. The expense ratio, 0.90%, remains the same. If you own the shares, hold on to them. But given the switch (and potential load for new investors), we are re-evaluating the fund.

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