(PUB) Investing 2015

May 2015 Vol. 23 No. 9

FundInvestor Research and recommendatio s for the s riou fund investo

SM

Assessing the Most Loved and Hated Funds

Dodge & Cox Income DODIX $16 Billion

Why? This fund falls somewhere between MetWest and Vanguard Total Bond Market Index on the risk/ reward spectrum and focuses on issue selection much more than interest-rate bets and other tactics of the bolder funds. The portfolio is mostly corporate bonds and mortgages with some Treasuries thrown in. Another draw has to be Dodge & Cox’s management stability. The chances of PIMCO -esque personnel turmoil are remote. Dodge & Cox has a sizable and stable management team with no stars. I highly recommend this fund and, in fact, own it.

RusselKinnel, Director of Fund Research and Editor

Fund Reports

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Fund flows tell us what’s on investors’ minds. I’m guessing many of you are contemplating buying some of the funds at the top of fund flow charts and selling some at the bottom. So, I thought I’d take a look at some of the actively managed funds that we rate near the top and bottom and shed light on their flows for the past 12 months ending in March 2015 . You’ll notice that a big theme is investors seeking out replacements for PIMCO Total Return PTTRX in the wake of Bill Gross’ dramatic departure in fall 2014 . Metropolitan West Total Return Bond MWTRX $36 Billion Why the big inflows? PIMCO without the drama. MetWest was started by ex- PIMCO managers, but there are some notable differences with PIMCO . First, MetWest avoids derivatives and vows to stay on that course. Thus, issue selection can still contribute, but it means MetWest may have to close to new investors at some point. Buy this fund and you get a pretty bold core bond fund that will make an array of bets on things like yield-curve positioning, credit-spread direction, and sectors. Many investors fleeing PIMCO have gone with this fund as a bold option or with Vanguard Total Bond Market Index VBTLX as a passive option. So, if bold is good for you, then by all means join the crowd on this excellent fund. Biggest Inflows

Merger PIMCO Total Return

T. Rowe Price Div Sm Growth Virtus Emerging Markets Opps

Morningstar Research 8 What Happens When Vanguard Owns Everything?

Dodge & Cox International Stock DODFX $11 Billion

The Contrarian

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Managers Who Spit Out Their Own Cooking

Why? This fund recently closed to new investors, so I’ll be brief. The fund is knocking the cover off the ball. It’s a great fund with a Morningstar Analyst Rating of Œ , and I own it.

Red Flags 11 Global With a Heavy Emphasis on the USA

Market Overview

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PIMCO Income PONDX $9 Billion

Leaders & Laggards

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Why? Great returns under managers Dan Ivascyn and Alfred Murata. Ivascyn was named group chief invest- ment officer following Bill Gross’ departure. The worry here would be that he gets overloaded, but so far we’re not too concerned. We kept this fund rated • after Gross’ exit, so, yes, it’s worth buying, but beware the risks. This is a multisector fund that currently has big stakes in high-yield bonds, foreign bonds, and nonagency mortgages. All of those are on the high-risk side of the bond world. The skippers have managed those risks with aplomb so far, but you can be sure there will be some years in the red.

Manager Changes and News

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Portfolio Matters

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Making Your Retirement Portfolio Buckets Work

Tracking Morningstar

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Analyst Ratings

Income Strategist

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Free-Range Muni Funds

Changes to the 500

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FundInvestor 500 Spotlight

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Continued on Page 2

Follow Russ on Twitter @RussKinnel