13
Morningstar FundInvestor
March 2
013
Leaders
Fidelity Small Cap Discovery
FSCRX
This small-cap fund gained a whopping
23
.
97%
in the
trailing
12
-month period, beating out almost all of
its category peers. Manager Chuck Myers emulates
parts of Warren Buffett’s investing style, preferring to
buy and hold undervalued companies and avoid a
company if he doesn’t understand the business model.
Myers’ picks paid off handsomely, especially in the
industrials, real estate, and consumer cyclical sectors.
Top holdings like
Spectrum Brands
SPB
and
Geo
Group
GEO
posted double-digit returns. Those returns
spurred inflows, which in turn led Fidelity to close the
fund to new investors at the end of January.
Managers Bond
MGFIX
This intermediate-term bond fund beat out more than
90%
of its category with a
8
.
72%
return in the past
12
months. The management team of
Loomis Sayles
Bond
LSBRX
, led by Dan Fuss, uses a similar strategy
here as with its flagship fund except that it will in-
vest only
10%
or less in high yield and
10%
or less in
nondollar debt. The managers focus on midquality
corporate bonds and are not shy about buying bonds
in temporarily downtrodden sectors. The fund’s rela-
tively heavy weighting in
BBB
bonds, as well as a
9%
allocation to high-yield, benefited from
2012
’s rally.
Also, its stake in financials (which were out of favor
in
2011
) helped as that sector rebounded last year.
Templeton Global Bond
TPINX
This fund’s
8
.
26%
trailing
12
-month return beat out
92%
of its world-bond peers. The management
team, led by Michael Hasenstab, does not take cues
from issuance-weighted global-bond benchmarks and
instead decides where to invest based on indicators
of fiscal health, such as government debt levels. The
managers also actively manage currency exposure.
The fund’s unique strategy can cause it to look out of
step with its peers at times, as it did in
2011
.
However, moves that hurt performance in
2011
helped in
2012
, such as its short Japanese yen posi-
tion and stake in Irish government bonds.
Laggards
Westport Select Cap
WPSRX
This mid-growth fund’s
3
.
88%
return placed it behind
more than
80%
of its category peers in the past
12
months. Managers Andy Knuth and Ed Nicklin like to
buy small-cap turnarounds based on their long-term
growth prospects, and they tend to keep the portfolio
quite concentrated. Over the past
12
months, a
handful of stock picks, especially in the consumer
defensive sector, have hurt performance. For
instance,
ITT Educational Services
ESI
and
Big
Lots
BIG
both dropped more than
20%
, shaving
painful percentage points from fund performance.
Calamos Convertible
CCVIX
This fund landed in its category’s basement with a
2
.
55%
gain over the trailing one-year period. The
management team uses quant screens and fundamen-
tal research to find buying opportunities, and it
primarily invests in higher-quality convertibles than
its peers do. For instance, its stake in below-invest-
ment-grade securities as of the fourth quarter of
2012
was just more than half that of the convertible-fund
category average. While its cautious profile has
provided solid returns with good downside protection
in the long term, it has held it back in the past
12
months as more-speculative fare outperformed.
Artisan Small Cap Value Investor
ARTVX
This fund’s
3
.
09%
return over the past
12
months is
almost a full
10
percentage points lower than the
small-blend fund category average for the same period.
The management team likes to buy cheap small-cap
stocks but will only invest in companies with solid busi-
ness models and balance sheets. In
2011
the managers
took the opportunity to buy economically sensitive
firms at a low price, but these firms did not rebound
as the managers expected. The fund’s overweighting
to energy and technology stocks stung as those
sectors lagged, but losses from picks like software
company
Diebold Incorporated
DBD
and
Forest Oil
FST
dented fund performance even further.
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Contact Kailin Liu at
Ten Worst-Performing Funds
Fund Name
YTD Cat Rank %
Dynamic US Growth I
99
Hussman Strategic Total R 99
Janus Twenty T
99
Royce Low Priced Stock Sv 99
Royce Micro-Cap Invmt
99
Buffalo Mid Cap
98
Fairholme
98
First Eagle US Value A 98
PIMCO Inflation Response 98
Royce Value Svc
98
33
Ten Best-Performing Funds
Fund Name
YTD Cat Rank %
CGM Focus
1
Champlain Mid Cap Adv
1
Fairholme Focused Income 1
Longleaf Partners Interna 1
T. Rowe Price Tax-Free Sh 1
Tweedy, Browne Global Val
1
FPA Paramount
2
Invesco Equity and Income 2
Oakmark International I
2
Vanguard Precious Metals 2
3
A Great 12 Months for Managers Bond
Leaders & Laggards
|
Kailin Liu
