BEST OFFERINGS FROM TOP FUND FAMILIES
When it comes to investing, quality matters.
When it comes to investing, quality matters. Which is why we've pulled together our picks of mutual fund brands you can trust in the September 2006 issue of Kiplinger's Personal Finance. These mutual fund families treat their clients as if they were partners. They keep their management fees reasonable, and their funds post superior long-term results. Want to invest with a standout? Here are some of the best funds available to new customers among our 12 best families. We highlight the styles of their individual managers, as well as what sets many of these funds apart. Take a look and see if any of these are right for you.
By Lisa Dixon and Steven Goldberg
International Discovery (FIGRX). Invests in a broad range of international companies. Manager William Kennedy focuses on stocks of large companies but doesn’t ignore small and midsize names.
Overseas (FOSFX). Don’t worry about this fund’s poor record: New manager Ian Hart posted sterling returns at his last fund, Fidelity Europe Capital Appreciation.
Value (FDVLX). Richard Fentin is one of Fidelity’s underappreciated stars. He buys bargain-priced stocks of all sizes for this fund.
All index and bond funds, including Floating Rate High Income (FFRHX), which is managed by Christine McConnell (right) and included in the Kiplinger 25. Most index funds are even cheaper than Vanguard’s.
T. ROWE PRICE
Emerging Markets (PRMSX). Four managers stationed around the world prospect for reasonably priced companies with fast-growing earnings.
Equity Income (PRFDX). Run by manager Brian Rogers (right) since its inception more than 20 years ago. He focuses on large companies that are cheaply priced and that pay solid dividends.
Growth Stock (TRSAX). Specializes in stocks of big, fast-growing companies selling at reasonable prices. The fund, which is one of the Kiplinger 25, is performing well, and these stocks are poised to come back into favor.
Health Sciences (PRHSX). Health-care stocks in this fund range from biotechnology and small pharmaceutical companies to managed-care, medical-device and big pharma names.
T. ROWE PRICE, con't.
New Horizons (PRNHX). Jack Laporte (right) has done a first-class job ferretting out fast-growing small and midsize companies for this fund for nearly two decades.
Real Estate (TRREX). Manager David Lee looks for companies with superior managers. He buys mainly real estate investment trusts, but also invests in real estate operating companies, including hotels.
Spectrum Growth (PRSGX). A team allocates this fund among a variety of other T. Rowe funds at no extra cost -- which makes it an ideal core holding. The fund is currently tilting towards large, growing companies.
All Retirement funds, which invest in a range of other Price funds and adjust holdings automatically to become more conservative as you approach retirement.
Growth & Income (VQNPX). Uses computer models in an effort to beat Standard & Poor's 500-stock index without extra risk.
Primecap Core (VPCCX). A team of managers searches out growth stories, while paying attention to price. The fund was launched in 2004 and is one of the Kiplinger 25.
Selected Value (VASVX). Investing in bargain-priced midsize companies, this fund is run by the same team that manages the lion’s share of large-cap fund Windsor II.
Wellington (VWELX). This old-fashioned balanced fund invests about two-thirds of assets in stocks of large firms, with an emphasis on value. The rest is in corporate bonds, Treasuries, and other fixed-income securities.
Windsor (VWNDX). Invests with a contrarian approach, buying mainly large companies when their stocks are depressed.
Windsor II (VWNFX). Managed by a different group of advisers than its Windsor sibling, this fund also searches out mostly large companies in beaten-down sectors.
All bond and index funds. Vanguard pioneered the index fund for individual investors. It runs bond and index funds superbly and charges rock-bottom fees.
International Value (ARTKX). Co-managers David Samra (right) and Daniel O’Keefe look abroad for financially strong, high-quality companies that are selling at a discount to his estimate of their value. The fund invests in companies of all sizes.
Opportunistic Value (ARTLX). Launched in March 2006, the fund invests in undervalued companies. It's run by the same team that pilots top-performing Artisan Mid Cap Value, which is closed to new investors. But this fund emphasizes larger companies.
Aggressive Investors 2 (BRAIX). Manager John Montgomery (right) uses computer models to pick stocks. The fund, launched in late 2001, invests in companies of all sizes, but it focuses on midsize firms with good growth prospects. Part of the Kiplinger 25.
Small-Cap Growth (BRSGX). Montgomery applies his computer screens to small-company stocks. Assets stand at just $275 million making this fund nimble enough to invest wherever it finds opportunity. Also included in the Kiplinger 25.
UltraSmall Company Market (BRSIX). This index fund buys and holds a representative sampling of the smallest 10% of companies on the New York Stock Exchange.
Mid Cap (BUFMX). A firm founded by John Kornitzer (right) runs most of the Buffalo funds. For each of the funds mentioned here, the managers identify long-term investment trends, then search for companies that should benefit from those trends –- and whose stocks are reasonably priced. Mid Cap invests in a range of midsize companies, with bulk of assets currently in consumer, health care and tech stocks.
Science & Technology (BUFTX). A company can be considered for this fund if it develops, uses or is expected to benefit from scientific or technological advances. Managers particularly look for companies with above-average earnings potential.
Small Cap (BUFSX). Invests in a mix of small companies that fit the managers' long-term themes.
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Income (DODIX). A team of experienced managers invests in medium-maturity, high-quality taxable bonds. Although they make interest-rate forecasts, the managers focus on researching companies and searching for attractively priced bonds. Included in the Kiplinger 25.
International Stock (DODFX). The fund was launched in 2001, but its eight managers have been at Dodge & Cox an average of 16 years. They look for beaten-down stocks, then wait patiently for them to turn around. The fund’s biggest bets now are on Europe (excluding the United Kingdom) and Japan. Also one of the Kiplinger 25.
Bond (HABDX). Through uncanny interest-rate bets and astute bond picking, Bill Gross (right), head of fixed-income management firm Pimco, and his analysts have produced terrific returns. As manager of Harbor Bond, Gross invests mainly in intermediate-maturity taxable bonds. Part of the Kiplinger 25.
Capital Appreciation (HCAIX). Focuses on stocks of large, fast-growing companies. “Sig” Segalas, of Jennison Associates, has managed the fund since 1990.
International (HIINX). Hakan Castegren, who has run this fund since 1987, searches out undervalued stocks with strong franchises around the world. He’s assisted by four veteran analysts.
Real Return (HARRX). Launched in 2005 and run by Pimco manager John Brynjolfsson, this fixed-income fund invests primarily in Treasury Inflation-Protected Securities (TIPS).
International (LLINX). Longleaf's managers load up on a handful of stocks selling at steep discounts to their judgment of the companies’ worth -- then wait patiently. International, which invests in stocks around the world, reopened to new investors in July 2006. Co-manager Mason Hawkins says recent volatility in international markets has created plenty of investment opportunities. The fund’s biggest bets now are in Japan and, surprisingly, the U.S. The fund is coming off a period of uninspiring performance, partly because Longleaf hedges much of its exposure to foreign currencies.
Focus (MFOCX). Invests in large growth companies and concentrates on 20 to 30 of manager Tom Marsico’s (right) best ideas. For each of the Marsico funds, the mangers identify big-picture economic trends, then research companies that fit those themes.
Growth (MGRIX). For this large growth fund, Marsico invests in a more diversified selection of stocks than for Focus -– though the portfolio is still relatively concentrated. Included in the Kiplinger 25.
International Opportunities (MIOFX). Manager Jim Gendelman searches out large growth companies outside the U.S., including some in volatile emerging markets. Also chosen for the Kiplinger 25.
21st Century (MXXIX). Manager Cory Gilchrist invests in growing companies of all sizes. Not surprisingly, the fund hews to the same themes -- and many of the same stocks -- as Marsico Focus and Growth. But the fund has fewer assets, allowing it to own more midsize companies.
Equity (MSEFX). Like all Masters’ Select funds, this fund is run by a team of mangers from outside investment firms, with each manager independently focusing on his own favorite stocks. Equity’s managers include Chris Davis and Ken Feinberg (right) of Selected American; Mason Hawkins of Longleaf; and Bill Miller of Legg Mason Value, among others. Part of the Kiplinger 25.
Value (MSVFX). Four value manger teams independently search for undervalued companies of all sizes.
Smaller Companies (MSSFX). Five manager teams buy stocks of small firms according to their own investment style -- from value to growth. Recent performance has been uninspiring, but the fund has first-rate managers.
Equity & Income (OAKBX). Invests roughly 60% in stocks and 40% in bonds. The stock portion focuses on undervalued companies of all sizes. The fixed-income portfolio consists mainly of Treasuries, with small stakes in other types of debt. New investors must buy this fund directly from Oakmark.
Global (OAKGX). Invests in bargain-priced companies of all sizes, both in the U.S. and abroad.
Oakmark (OAKMX). Oakmark's flagship fund has gravitated in recent years toward cheap blue-chip stocks -- what co-manager Bill Nygren (right) calls superior companies selling at average prices. This bold move for the value-oriented Nygren was premature.
International (OAKIX). David Herro, a dogged value investor, primarily buys stocks of midsize and large companies outside the U.S. Like Nygren, Herro has recently moved up the quality ladder -- both by trimming his holdings in emerging markets and by buying larger companies. Included in the Kiplinger 25.
Select (OAKLX). Typically owns 15 to 20 stocks. Co-managers Nygren and Henry Berghoef normally invest in below-average companies with dirt-cheap shares. But undervalued blue chips are the theme nowadays. Also part of the Kiplinger 25.