13
Morningstar FundInvestor
April 2
014
Leaders
Vanguard Capital Value
VCVLX
Strong stock-picking in the technology and health-
care sectors has driven recent results at this fund.
The fund’s
34%
return during the trailing
12
months
through March
2014
outpaced the large-blend
category average by nearly
13
percentage points.
Semiconductor manufacturers were among the
fund’s top contributors:
Micron Technology
MU
and
GT Advanced Technologies
GTAT
both posted
triple-digit returns during the period. The fund’s stake
in small-cap specialty pharmaceutical company
TherapeuticsMD
TXMD
also boosted returns as
the stock rose more than
250%
during the period.
T. Rowe Price New Horizons
PRNHX
Tech and health-care names powered small-cap funds,
too. T. Rowe Price New Horizons benefited from
strong returns during the past year from tech holdings
such as
Netflix
NFLX
and biotech firms such as
Regeneron Pharmaceuticals
REGN
, which markets
therapies to combat eye disease, inflammation, and
cancer. The fund’s international picks also fared well,
led by Chinese Internet television company
Youku
Tudou
YOKU
, which gained
66%
in
2013
before suffer-
ing a loss when China-region equities broadly strug-
gled in
2014
’s first quarter. In the
12
months through
March, this fund’s
33
.
7%
return outpaced
91%
of
peers. (The fund, which is the largest actively man-
aged small-growth offering at roughly $
17
billion
in assets, closed its doors to new investors at the
end of
2013
.)
Janus High-Yield
JAHYX
This fund’s move to shun interest-rate risk in favor of
taking on additional credit risk paid off during the
past year. The fund holds a larger slug of debt rated B
or lower—including a sizable stake in
CCC
rated
fare—compared with its typical high-yield category
peer. That stake fueled results as
CCC
issues were
among the strongest-performing bonds in
2013
and
early
2014
. The fund’s
8
.
1%
return during the
12
months through March bested
84%
of high-yield
category peers.
Laggards
American Funds American Mutual
AMRMX
A light stake in technology firms and an elevated
stake in sluggish energy firms weighed on this fund
during the past year. This offering typically holds
up better than large-value peers during market de-
clines but rarely leads during rallies. The
12
months
through March were no exception, as the fund’s
17
.
9%
return lagged more than
80%
of category peers’.
The fund’s leading detractor,
FirstEnergy
FE
, declined
by more than
14%
during the stretch. Also in the
red during the past
12
months were staples such as
Coca-Cola
KO
and
Avon Products
AVP
, which
historically have lagged the broader market during
prolonged bull markets.
Wasatch Small Cap Growth
WAAEX
This fund’s cautious approach, and a few stock-picking
misfires, led to peer-lagging returns. In the midst of
a small-growth rally, this offering’s
21
.
3%
gain during
the trailing
12
months fell to the category’s bottom
quintile. During that stretch, manager Jeff Cardon
trimmed top-performing holdings as their prices
rose—forgoing further potential gains in order to
avoid holding stocks with lofty valuations. The fund
also missed on some stock picks. Data storage firm
Fusion-io
FIO
and a slug of international equities,
including Mumbai-based
Yes Bank
, tempered returns.
Eaton Vance Floating Rate
EVBLX
This fund’s conservative positioning was a headwind
during the
12
months through March. The fund carried
a heavy weighting to bank loans rated
BB
or higher
during the latter part of
2013
. Those high-quality
issues didn’t keep pace with racier
CCC
rated fare.
The fund’s
3
.
1%
gain, a decent absolute result, lagged
the bank-loan category average of
4
.
1%
and fell to
the category’s bottom quintile during the past year.
œ
Ten Worst-Performing Funds
Fund Name
YTD Cat Rank %
Conestoga Small Cap
100
CGM Focus
99
Weitz Hickory
99
ASTON/Montag & Caldwell 98
CGM Realty
98
Eaton Vance Floating Rate 98
Ariel Investor
97
Dynamic US Growth
97
Thornburg International
97
Franklin Balance Sheet
96
Ten Best-Performing Funds
Fund Name
YTD Cat Rank %
ClearBridge Aggressive Gr
1
FPA Capital
1
FPA Perennial
1
Fairholme Focused Income 1
First Eagle Overseas
1
Janus Contrarian
1
Loomis Sayles Investment
1
Oakmark Select
1
Vanguard Capital Value
1
Virtus Foreign Opportunity 1
An Explosive 12 Months for
Vanguard Capital Value
Leaders & Laggards
|
Flynn Murphy
