13
Morningstar FundInvestor
February 2
013
Leaders
Artisan Global Opportunities
ARTRX
This world-stock fund’s returns lead the pack with
a
22
.
26%
gain over the past
12
months. The manage-
ment team likes to buy industry-leading companies
with clean balance sheets and healthy profit growth.
This philosophy has served the fund well, as it
enjoyed several winning picks, especially in the tech-
nology and health-care sectors. Top holdings like
Regeneron Pharmaceuticals
REGN
,
Google
GOOG
,
and
eBay
EBAY
made impressive gains. In
2012
,
the fund moved Morningstar categories from large
growth to world stock.
PIMCO Income
PONDX
This multisector-bond fund returned
21
.
03%
in the
past
12
months, landing near the top of its category.
This fund focuses on producing consistent monthly
income payouts and has relied on mortgages in the
past few years to do so. In addition to mortgages
(especially nonagency mortgages), the fund gets yield
from allocations to high-yield and non-U.S. bonds.
The fund’s mortgage exposure, helped along by eco-
nomic leverage, buoyed performance in the past
several months as mortgages surged ahead in
2012
.
The stake in subprime nonagency mortgages helped
considerably as those bonds rallied last year, in some
cases making nearly
50%
gains.
Franklin Income
FKINX
This fund’s
14
.
50%
gain was among the best in the
conservative-allocation category for the past
12
months. The management team boosts yield by
investing in preferred shares, high-yield bonds, and
convertibles in addition to traditional stocks and
investment-grade bonds. The asset allocation also
can stray dramatically from the typical
70
/
30
bond-
stock split among conservative-allocation funds, and
the managers pay little attention to benchmark
sector weightings. A higher allocation to stocks and
high yield lifted performance as stocks outper-
formed bonds and lower-quality issue outperformed
high-quality bonds.
Laggards
FPA New Income
FPNIX
This nontraditional bond fund’s
2
.
08%
gain over the
trailing one-year period was worse than
86%
of
its category. Manager Tom Atteberry runs the fund to,
first and foremost, avoid losing money, with the
added goal of a consistent gain above inflation. As a
result, the fund has higher credit quality and lower
duration than its category peers. Atteberry does invest
heavily in mortgage securities, however. In the
past
12
months, the fund’s high-quality, low-duration
holdings have lagged as lower-quality, longer-term
fare has outperformed.
Calamos Growth
CVGRX
This large-growth fund gained
5
.
90%
during the past
12
months, scraping the bottom of its category.
The management team uses quantitative models,
fundamental analysis, and top-down macroeconomic
analysis to find companies with strong and sustain-
able growth. The portfolio frequently has an over-
weighting to technology, an area of perceived exper-
tise for the managers. But this overweighting hurt the
fund a bit as that sector lagged others. Poor stock
selection in several sectors dragged performance
down even more. Several basic-materials picks, such
as
Barrick Gold Corporation
ABX
and
Cliffs
Natural Resources
CLF
, suffered double-digit losses.
American Century Equity Income
TWEIX
This fund’s
14
.
41%
gain in the trailing
12
-month
period was worse than
78%
of its large-value peers.
The managers like to buy dividend-rich value stocks,
and they frequently own convertible bonds and
preferred shares as well. The fund’s allocation to high-
quality holdings and convertible bonds (which gain
less than stocks during equity rallies) can make it lag
peers when stock markets surge ahead, which was
the case in
2012
’s rally. Many of the managers’ picks
in the best-performing sectors, like consumer cycli-
cal and financial services, lagged behind other stocks
in the sector.
œ
Contact Kailin Liu at
Ten Worst-Performing Funds
Fund Name
YTD Cat Rank %
Hussman Strategic Total R 99
Janus Twenty T
99
Royce Low Priced Stock Sv 99
Royce Micro-Cap Invmt
99
Causeway International Va 98
Columbia Acorn Internatio 98
First Eagle US Value A 98
Janus T
98
Vanguard Interm-Term Bond 98
First Eagle Overseas A 97
33
Ten Best-Performing Funds
Fund Name
YTD Cat Rank %
CGM Focus
1
Longleaf Partners
1
Oakmark International I
1
PRIMECAP Odyssey Growth 1
Vanguard Capital Opportun 1
Artio International Equit
2
Invesco Equity and Income 2
PIMCO Fundamental Advtg T 2
TCW International Small C 2
Vanguard Precious Metals 2
3
Leader of the Pack:
Artisan Global Opportunities
Leaders & Laggards
|
Kailin Liu
