13
Morningstar FundInvestor
July 2
014
Leaders
TCW International Small Cap
TGICX
Manager Rohit Sah’s moves are finally starting to pay
off. He had a strong, albeit volatile, run during a
seven-year stint with former charge
Oppenheimer
Small Company
OSMAX
. That created big expecta-
tions when he started at this fund in late February
2011
. Sah disappointed early on, as his tendency to
make big sector bets based on his macroeconomic
outlook worked against him. More recently, his bias
toward emerging markets has paid off. Thanks to
picks like
Finolex Cables
, the fund’s
36
.
4%
one-year
gain bests all foreign small/mid-growth
category peers.
Sound Shore
SSHFX
The fund’s one-year return of
29
.
6%
ranks among the
large-cap value category’s best. Shares of longtime
holding
Southwest Airlines
LUV
more than doubled
during that period, as investors have reacted favor-
ably to the firm’s expansion efforts, including launch-
ing an international service. Energy picks also fared
well.
Weatherford International
’s
WFT
stock price
suffered earlier in the year after the firm reported
big losses for
2013
’s fourth quarter. The stock has
rebounded since, thanks in part to enthusiasm about
Weatherford’s plan to partner with two other firms
in tapping unconventional oil-and-gas resources
in China.
Third Avenue Real Estate Value
TAREX
This fund’s one-year
21
.
3%
gain tops all global real
estate rivals, thanks to finishing
2013
well. Plus,
the fund’s long-term record is spectacular. Its three-,
five-, and
10
-year returns all rank within the catego-
ry’s top quintile or better. Comanagers Mike Winer
and Jason Wolf have built this record by favoring real
estate operating companies. Unlike
REIT
s,
REOC
s
aren’t encumbered by dividend requirements and can
reinvest their cash in property development. The fund
will lag, though, when
REIT
s outperform
REOC
s.
Laggards
IVA International
IVIOX
Soaring equity markets do not play to this fund’s
strengths, and the fund’s one-, three-, and five-year
returns are in the cellar. Comanagers Charles de
Vaulx and Charles de Lardemelle look for shares of
solid companies selling at deep discounts to their
assessments of intrinsic value, which include worst-
case scenarios. That’s not unusual. In addition, they
hold a lot of cash and gold to protect against losses,
and that’s held the fund back. Price declines in sev-
eral Chinese stocks have hurt as well. Shares of
Springland International Holdings
have lost nearly
25%
since the end of
2013
’s third quarter, when the
fund first established its position.
AMG Yacktman
YACKX
This fund’s one-year return ranks near the large-blend
category’s bottom, while its
10
-year gain ranks near
the top. A sizable cash stake and an overweighting to
consumer staples stocks have hurt the fund. In short,
the fund is conservatively positioned, so it’s not
surprising that it’s lagging in a strong rally. Picks like
eBAY
EBAY
have also hurt.
ASTON/TAMRO Small Cap
ATASX
The fund’s
12
.
6%
one-year return falls short of all but
a few small-growth peers. Management’s prefer-
ence for small-cap firms with strong competitive posi-
tions hurt in the final six months of
2013
, when
riskier, more aggressive small-growth stocks led the
way. Returns have improved somewhat in
2014
,
but consumer discretionary names like
Francescas
Holdings
FRAN
and
Quicksilver
ZQK
have held
the fund back. Both stocks have lost more than
40%
for the year to date.
œ
Ten Worst-Performing Funds
Fund Name
YTD Cat Rank %
Vanguard Precious Metals 100
Ariel Discovery Investor
99
CGM Focus
99
Conestoga Small Cap Inves 98
Greenspring
98
ASTON/Montag & Caldwell 97
Berwyn
97
Scout Core Plus Bond Inst
97
Weitz Hickory
97
Eaton Vance Floating Rate 96
Ten Best-Performing Funds
Fund Name
YTD Cat Rank %
ClearBridge Aggressive Gr
1
Fidelity Capital & Income
1
Fidelity Independence
1
Fidelity Select Health Ca
1
Loomis Sayles Investment
1
Matthews India Investor
1
Oakmark Select I
1
TCW International Small C 1
Vanguard Capital Value In 1
Fidelity New Markets Inco 2
A Rally for TCW International Small Cap
Leaders & Laggards
|
Alec Lucas
