Hang in There With This Value Fund
Patience is required for investors in the Dodge & Cox Stock Fund, but its long-term outperformance proves it's worth the wait.
Value investing enjoyed 15 minutes of sunshine in early 2025, when the S&P 500 sank 19% from its February peak to its early April trough. Dodge & Cox Stock (DODGX) — a member of the Kiplinger 25, our favorite no-load mutual funds — held up better, albeit with a 15% decline.
Since then, the large-company value fund has rebounded 21% through September. That's impressive, but it lags the S&P 500, which has bounced 34%. All told, over the past 12 months through September 30, Dodge & Cox Stock has climbed just over 9%, far short of the nearly 18% gain in the S&P 500.
It's a good time to remember that the point of holding funds with different investing approaches is to enhance diversification — it can smooth out your returns, for starters. These days, the S&P 500 is more growth- and momentum-tilted than ever, which makes Dodge & Cox Stock a good foil.
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.
The fund's biggest holdings, Charles Schwab (SCHW), industrial firm Johnson Controls International (JCI) and aerospace and defense company RTX (RTX), bear no resemblance to the tech giants at the top of the S&P 500. Each of the three is up more than 40% over the past 12 months, by the way.
Hunting for bargains
The fund's six managers are true-blue contrarians. If a sector or industry is struggling, you can bet they're looking for hidden gems. Recently, they increased their investment in the health care sector, a market laggard since the start of 2023 and the worst-performing sector over the past 12 months.
Over the first half of 2025, they even added to stakes in embattled health giant UnitedHealth Group (UNH), which brought back a former chief executive to run the firm in May. "UNH is currently trading at a discount compared to the overall market, the health care sector and its historical valuation," the managers said in a report over the summer.
It can take time for their investment hypotheses to play out, so patience is required for investors in the fund. But over the past five years, Dodge & Cox Stock's 17% annualized return beats the S&P 500.
Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.
Related Content
-
Is the Housing Market's "Lock-In Effect" Finally Starting to Ease?As mortgage rates stabilize and fewer owners hold ultra-low loans, the lock-in effect may be losing its grip.
-
My wife says our $4.3 million savings are 'our grandkids' inheritance.'I want to travel while we are still healthy, but my wife wants to pass down our wealth. Who is right?
-
Senior Living Communities: A Guide to Finding the Right FitSenior living facilities have improved and are as diverse as the people who inhabit them. Now, they're more than just a place to go — they're a place to grow.
-
Today's Senior Living Communities Are Not Your Grandma's 'Old Folks' Home': An Expert Guide to Shopping for the Right Fit
Senior living facilities have improved and are as diverse as the people who inhabit them. Now, they're more than just a place to go — they're a place to grow.
-
3 Common Misconceptions About Working With a Financial PlannerThink financial planners are only for the wealthy and that AI can replace human advice? Nope. Even people with moderate wealth need professional advice.
-
Should You Consider Investing in the Quantum Computing Sector? This Investment Adviser Has Some SuggestionsInvestors interested in quantum computing could consider ETFs focused on cloud services enabling small businesses to use big technology.
-
S&P 500 Hits New High Before Big Tech Earnings, Fed: Stock Market TodayThe tech-heavy Nasdaq also shone in Tuesday's session, while UnitedHealth dragged on the blue-chip Dow Jones Industrial Average.
-
Yes, Artificial Intelligence Stocks Are BoomingIt's fair to ask about the latest tech boom, "Is it really different this time?"
-
I'm an Estate Planning Attorney: These Are the Estate Plan Details You Need to Discuss (And What to Keep Private)Gen Xers and Millennials would like to know if they're going to inherit (and how much), but Baby Boomers in general don't like to talk about money. What to do?
-
I'm a Financial Adviser: This Is How You Can Minimize the Damage of Bad Market Timing at RetirementPoor investment returns early in retirement on top of withdrawals can quickly drain your savings. The ideal plan helps prevent having to sell assets at a loss.
-
'You Owe Me a Refund': Readers Report Challenging Their Attorneys' BillsThe article about lawyers billing clients for hours of work that AI did in seconds generated quite a response. One law firm even called a staff meeting.
