2
The fund has just $
4
.
5
billion in assets, giving them
more flexibility than most topnotch foreign-
equity funds.
USAA International
USIFX
is another appealing
Europe-lover that might have escaped your notice. It’s
run by Marcus Smith and Daniel Ling of
MFS
. They
take a moderate-growth approach with an emphasis
on high-quality stocks.Thus, the fund is a little more
defensive than most growth funds. The fund has
71%
of assets in Europe, featuring large weightings in the
United Kingdom, France, Germany, and Switzerland.
Asia, Too
Asia’s biggest emerging markets, China and India, had
disappointing growth in
2013
but remain compelling
for the long term. Last year I picked
Matthews Asia
Dividend
MAPIX
and
Matthews Asian Growth
& Income
MACSX
as Asia plays. I still like both funds
quite a lot, but Asia Dividend is closed and has lost
lead manager Jesper Madsen, so Asian Growth
&
Income it is. The fund is an appealingly cautious play
on Asia as it invests in a mix of convertible bonds,
preferred stocks, and dividend-paying stocks, and
therefore it provides much greater downside protec-
tion than Pacific/Asia ex-Japan peers.
‘Reforgotten’ Funds
Since before I joined Morningstar, we’ve written arti-
cles titled “Hidden Gems” or “Under the Radar Funds”
to highlight talented managers who haven’t gotten
much attention. However, as investors have fled ac-
tively managed equities in the past few years, I think
we need a new variation called “reforgotten funds.“
Many once-popular managers have seen assets ebb
in recent years even as they bolstered their research
staff. In a small-cap roundup a few months ago,
I wrote about how there were more good small-cap
funds open to new investors than you typically
saw five years into a rally. This month I’ll highlight
some great funds you may have forgotten about.
Westport Select Cap
WPSRX
is a patient fund that
has tried investors’ patience. Poor returns in the
snapback rallies of
2009
and
2012
have spurred inves-
tors to redeem the fund. Yet it fared well in the
down years of
2008
and
2011
thanks to the ability of
managers Andy Knuth and Ed Nicklin to find good
turnaround candidates trading at modest prices.
They’ve produced strong
15
-year results at this fund
and had good results at previous funds, too.
Longleaf Partners
LLPFX
and
Longleaf Partners
International
LLINX
are excellent funds run by
managers who are really committed to the long term
as well as to their shareholders. As I discussed in
the December issue, management invests in a limited
number of stocks that meet their strict valuation
standards. If you believe in concentrated, long-term
value investing, these two funds are worth long looks.
And being out of favor means management has max-
imum flexibility because of the smaller asset base.
Oakmark Equity & Income
OAKBX
flipped from get-
ting huge inflows earlier in the
2000
s to getting
sizable outflows in recent years. Comanager Ed Studz-
inski retired at the end of
2012
after the fund posted
poor returns in three out of the past four years. So,
it’s understandable that a slump and manager depar-
ture would spur redemptions. But Studzinski and
lead manager Clyde McGregor had built a brilliant
record. With McGregor still in charge and now
Where to Invest in 2014 and Beyond
Continued From Cover
The Largest and Smallest 15-Year Investor Returns
Name
Morningstar
Analyst
Rating
Morningstar
Category
Total Ret
% Rank
Cat 10 Yr
Total Ret
% Rank
Cat 15 Yr
Expense
Ratio %
Manager
TenureYrs
(Average)
American Funds Capital World G/I CWGIX
Œ
World Stock
24
12 0.82 10.52
ASTON/Montag & Caldwell Grw MCGFX
•
Large Growth
56
66 1.06 19.17
Causeway International Value CIVVX
Œ
Frgn Large Blend 25
1.24 9.31
Dodge & Cox Stock DODGX
Œ
Large Value
22
1 0.52 15.62
FPA Perennial FPPFX
Œ
Mid-Cap Growth 55
13 1.02 9.75
LKCM Equity LKEQX
•
Large Growth
25
14 0.81 7.27
Longleaf Partners LLPFX
•
Large Blend
80
12 0.91 23.25
Longleaf Partners International LLINX
´
Frgn Large Blend 73
9 1.29 9.46
Matthews Asian Grwth & Inc MACSX
•
Pac/ex-Asia Jpn
50
1 1.11 3.42
Royce Special Eqty Multi-Cap RSEMX
´
Large Blend
1.39 3.08
USAA International USIFX
´
Frgn Lg Growth
23
27 1.21 7.92
Vanguard European Stck Idx VEUSX
Œ
Europe Stock
57
71 0.12 5.42
Westport Select Cap WPSRX
•
Mid-Cap Growth 69
19 1.36 16.08
Data as of 12/31/2013
