22
I’m adding
Fidelity Focused Stock
FTQGX
to the
Morningstar
500
.
This marks manager Stephen DuFour’s return to the
pages of
FundInvestor
. A decade ago, DuFour ran
Fidelity Equity Income
II
(now
Fidelity Equity Divi-
dend Income
FEQTX
) with subpar results. They
weren’t awful, just below average. It was still a dis-
appointment because DuFour had been considered
a rising star. Yet he’s revived his career with strong,
top-quintile results managing Fidelity Focused
Stock since March
2007
.
There are quite a few differences between his current
and former charges. Fidelity Equity Income
II
had a
big asset base, a diffuse portfolio, and a relative
value strategy. Fidelity Focused Stock is a large-cap
growth-at-a-reasonable-price fund with a modest
asset base of $
2
billion. From March
2007
to March
2014
, the fund has nearly doubled its benchmark’s
returns. Impressively, it has only lagged in
2009
, and
since it lost a fair amount less than its peers in
2008
(
33%
versus the typical peer’s
41%
drop), that
can be forgiven.
The fund is definitely an unusual one. DuFour runs
huge turnover of
200%
and pays no heed to
benchmark weightings. To manage some of that risk,
he tends not to go over
6%
in a top holding.
The fund charges a modest
0
.
89%
expense ratio.
RS Value Goes Out
To make room, I am taking
RS Value
RSVAX
out of
the Morningstar
500
. We rate the fund Neutral
because it has seen wholesale manager changes in
the past
12
months. A total of five managers have
left in the past year, and the five current managers
were all named to the roster during the same period.
MacKenzie Davis and Ken Settles left
RS
Investment
Management to start their own firm in early
2014
.
Another two, Tim Bei and David Kelley, left to pursue
other interests in
2013
. Andrew Pilara, the most
senior member of the squad, stepped aside in mid-
2013
to become a senior advisor to the team
running this fund.
Name Change
Dynamic U.S. Growth
DWUGX
is now
Scotia
Dynamic U.S. Growth
.
Morgan Stanley Funds Merge
Morgan Stanley Focus Growth merged into
Morgan
Stanley Institutional Growth
MSEGX
. Both funds
were run as large-growth funds by Dennis Lynch.
Morgan Stanley Institutional Growth has a
5
.
25%
front load, a
0
.
95%
expense ratio, and a $
1
,
000
minimum investment. The combined fund now has
$
3
.
1
billion in assets. In the Morningstar
500
, we
have switched coverage to the surviving fund.
AMG Added to Yacktman Name
The Yacktman funds now come with parent company
AMG
’s name in front, so you’ll see them earlier
in the large blend listings on page
26
. In the index,
you’ll see them under the
AMG
heading.
Loomis Sayles/Natixis in Index
Although it’s confusing, some Loomis Sayles funds
come under the Natixis banner, so you’ll see some in
the index under the Natixis heading and some under
the Loomis Sayles heading. These parent company
classifications are chosen by the fund company.
œ
Summary of Changes
Add
Drop
Fidelity Focused Stock
RS Value
Morgan Stanley Institutional Growth Morgan Stanley Focus Growth
Rating Change
To
From
American Century Growth
‰ ´
PIMCO EqS Pathfinder
‰ ´
PIMCO Unconstrained Bond
‰ ´
Century Small Cap Select
´ •
Laudus US Large Cap Growth
´ ‰
Fidelity Focused Stock Joins M500
Changes to the 500
|
Russel Kinnel
What is Morningstar
FundInvestor
500
?
The Morningstar FundInvestor
500
features the industry’s
best and most notable funds.
Use the list to get new in-
vestment ideas and track the
funds you already own.
FundInvestor
subscribers have
access to one-page monthly
reports on all 500 funds on
mfi.morningstar.com. Just
type in the name or ticker of
the fund in the search box.
