Funds run by teams of marquee managers from different firms have been around for years. But here's a new wrinkle: a stellar fund available at a terrific price.
SunAmerica Focused Alpha Growth boasts two all-star managers: Ron Baron and Tom Marsico. The $362- million fund holds ten large-company issues, selected by Marsico, which account for 65% of assets, and 20 small- and midsize-company stocks, picked by Baron, which account for the remaining 35%. In mid May, the portfolio was valued at $21 per share, yet you could buy the fund for less than $18. How could that be?
Focused Alpha Growth (symbol FGF) is a closed-end fund. Unlike more-familiar open-end funds, closed-ends issue a fixed number of shares. Those shares trade like stocks and can be worth more or less than the assets the funds hold, depending on investor demand.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
In this case, investors seem to be making a big misjudgment. From the fund's July 2005 launch to May 15, its assets returned 12%. That tops the Russell 3000 index by six percentage points. Moreover, both managers have superior long-term records. Marsico Growth is in the Kiplinger 25 (see "The 25 Best Mutual Funds," May), and Baron's flagship fund, Baron Asset, gained an above-average 13% annualized over the past 15 years.
It's not unusual for closed-end funds to trade at a discount, but the size of Focused Alpha's discount -- 14% -- seems unwarranted. It may be that investors are inadvertently lumping it with other closed-end funds, many of which hold bonds or use borrowed money to boost returns. There's no guarantee that the gap between the fund's share price and its asset value will close. But when the stock market gives you access to two accomplished managers at a steep discount, it's almost like found money.
-
Fed's Rate Cuts Could Have Impacts You Might Not AnticipateUnderstanding how lower interest rates could impact your wallet can help you determine the right financial moves to make.
-
Past Performance Is Not Indicative of Your Adviser's ExpertiseMany people find a financial adviser by searching online or asking for referrals from friends or family. This can actually end up costing you big-time.
-
I'm want to give my 3 grandkids $5K each for Christmas.You're comfortably retired and want to give your grandkids a big Christmas check, but their parents are worried they might spend it all. We ask the pros for help.
-
Best Banks for High-Net-Worth Clientswealth management These banks welcome customers who keep high balances in deposit and investment accounts, showering them with fee breaks and access to financial-planning services.
-
Stock Market Holidays in 2025: NYSE, NASDAQ and Wall Street HolidaysMarkets When are the stock market holidays? Here, we look at which days the NYSE, Nasdaq and bond markets are off in 2025.
-
Stock Market Trading Hours: What Time Is the Stock Market Open Today?Markets When does the market open? While the stock market has regular hours, trading doesn't necessarily stop when the major exchanges close.
-
Bogleheads Stay the CourseBears and market volatility don’t scare these die-hard Vanguard investors.
-
The Current I-Bond Rate Is Mildly Attractive. Here's Why.Investing for Income The current I-bond rate is active until April 2026 and presents an attractive value, if not as attractive as in the recent past.
-
What Are I-Bonds? Inflation Made Them Popular. What Now?savings bonds Inflation has made Series I savings bonds, known as I-bonds, enormously popular with risk-averse investors. How do they work?
-
This New Sustainable ETF’s Pitch? Give Back Profits.investing Newday’s ETF partners with UNICEF and other groups.
-
As the Market Falls, New Retirees Need a Planretirement If you’re in the early stages of your retirement, you’re likely in a rough spot watching your portfolio shrink. We have some strategies to make the best of things.
