22
We are adding two bond funds and one emerging-
markets stock fund to the Morningstar
500
this month.
Scout Core Plus Bond
SCPYX
has proved to be
an agile fund that shifts among sectors quickly based
on changes in the investment landscape. In recent
years, management has shifted adeptly among Trea-
suries, corporate bonds, and mortgages. The Silver-
rated fund is subadvised by Reams Asset Manage-
ment. Read the facing page for more on this gem.
We are also adding
PIMCO Income
PONDX
to the
lineup. This $
21
billion Silver-rated fund has outpaced
its peers in the multisector-bond category. Multi-
sector funds are bolder than the typical bond fund in
that they can invest overseas, in high yield, or in
core U.S. sectors. (This fund doesn’t buy stocks the
way some “Income” funds do.)
Dan Ivascyn has run this fund since it was launched
in
2007
, and he’s done a fine job. The fund has
paid a monthly dividend of about $
0
.
05
per share
since then, though there are no guarantees that will
continue. The fund currently has
55%
of assets in
nonagency mortgages—these pay more than agency
mortgages because they don’t have a government
guarantee behind them. He also has
21%
in emerging
markets,
26%
in foreign developed markets,
12%
in
junk bonds, and
7%
in investment-grade corporates.
Our third addition is
Virtus Emerging Markets
Opportunities
HEMZX
, which is run by our Interna-
tional-Stock Fund Manager of the Year winner,
Rajiv Jain. Jain’s emphasis on risk makes this a rela-
tively stable fund. Consider this fund’s
10
-year
returns and investor returns: Virtus returned
17
.
7%
in
total returns and
18
.
3%
in investor returns through
the end of
2012
. This shows that investors were not
thrown off by volatility as they were able to stick
around for the good years.
To make room, we are dropping three of our smaller
funds:
Ariel Focus
ARFFX
,
Queens Road
Small Cap Value
QRSVX
, and
Wasatch Heritage
Growth
WAHGX
.
Meanwhile,
Neuberger Berman International
NBISX
is being merged into a nearly identical
fund,
Neuberger Berman International Institu
tional
NBIIX
. Under its new guise it will be named
Neuberger Berman International Equity Investor
and have the ticker
NIQVX
. No changes to the
strategy or management are planned.
We have raised our ratings on two funds, initiated
two more, and lowered one fund’s rating.
We raised
T. Rowe Price New Asia
PRASX
to
Bronze from Neutral and
Fidelity Small Cap
Discovery
FSCRX
to Gold from Silver. At T. Rowe
Price New Asia, we are growing increasingly
comfortable with manager Anh Luh as she nears the
four-year mark at the fund. She’s covered Asian
stocks for T. Rowe Price since
2000
and has proved
an able hand with a strong record so far at New Asia.
See Page
18
for more on Fidelity Small Cap Discovery.
Meantime, we lowered our rating on
PIMCO All
Asset All Authority
PAUDX
to Silver from Gold
because of asset limits. While we still like the fund,
its leverage and the high amount of some
PIMCO
funds it owns do give us pause. We are leaving
PIMCO All Asset
PASDX
at Gold because it doesn’t
have the leverage that All Authority does.
Finally, we are starting two relatively young funds at
Silver.
T. Rowe Price Balanced
RPBAX
and
Artisan Global Opportunities
ARTRX
are promising
funds with seasoned managers. You can see our
reports on these funds on pages
4
–
7
.
œ
Summary of Changes
Add
Drop
Scout Core Plus Bond
Ariel Focus
PIMCO Income
Queens Road Small Cap Value
Virtus Emerging Markets Opp
Wasatch Heritage Growth
Scout Core Plus Bond and PIMCO
Income Join the 500
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
investment 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.
