3
Morningstar FundInvestor
May 2
013
Dodge’s consistent strategy and performance and its
long-tenured managers make the funds dependable.
FPA Paramount
FPRAX
makes a timely appearance
on the list along with closed sibling
FPA Capital
FPPTX
now that
FPA
has gone no-load. At
FPA
Paramount, managers Eric Ende and Steve Geist look
for companies generating a high return on capital
but whose shares are trading at modest valuations.
They’ve guided the fund to strong returns, but
because
FPA
didn’t do anything to encourage sales
on the load side, the fund has a mere $
290
million
in assets. The fund has about one fifth of its portfolio
overseas and plans to gradually build that stake to
around half the fund.
Janus Triton
JATTX
continues to produce remark-
able results under Chad Meade and Brian Schaub.
Since
2006
, they have produced a
12
.
4%
annualized
return compared with
8
.
2%
for the Russell
2500
Growth. Needless to say, you shouldn’t expect them
to be that good the next seven years, but there’s
still a lot to like. They look for companies that have
strong competitive advantages but trade at modest
prices. This small-growth fund has outperformed in
each calendar year of its existence as they’ve
executed brilliantly. One worry here is that asset
growth could derail the process, but management
says it is considering closing to new investors.
LKCM Equity
LKEQX
and
LKCM Small Cap Equity
LKSCX
are two below-the-radar funds that are
worth a look. They have ”institutional” in their names,
but their investment minimum is just $
2
,
000
.
Managers Luther King and Steve Purvis look for high-
quality growth stocks with healthy profit margins
such as
IBM
IBM
,
Exxon Mobil
XOM
, and
Google
GOOG
. They are patient, low-turnover investors who
are picky about the prices they will pay for growth.
Primecap funds in Pasadena went six for six as three
funds it subadvises for Vanguard plus three it runs
under the Primecap Odyssey label all made the list.
They are great growth investors who think longer-
term than the competition.
Vanguard Capital Opp-
ortunity
VHCOX
recently reopened, so if you invest
through Vanguard, this is an excellent opportunity.
PIMCO Income D
PONDX
is the only
PIMCO
D share
fund to pass through the expense screen as the firm
tends to give D share investors a big bill. However,
PIMCO
Income is in the pricey multisector-bond cate-
gory, so it slipped into the cheapest quintile with a
0
.
70%
expense ratio. Dan Ivascyn takes an aggres-
sive approach in order to meet the fund’s goal of a
monthly $
0
.
05
dividend. He shifts among mortgages,
high yield, Treasuries, and foreign and emerging-
markets debt to stay ahead of his peers while hitting
that dividend goal.
Selected American
SLADX
may surprise you as its
fondness for financials has made it a laggard of
late. However, the full record for managers Chris
Davis and Ken Feinberg remains solid.
T. Rowe and Vanguard Dominate
T. Rowe Price has eight U.S. stock funds and two for-
eign funds on the list. The firm’s long-tenured
managers, consistent approach, and willingness to
close funds has led to great results at these funds.
We’re big fans of
T. Rowe Price Capital Apprecia-
tion
PRWCX
, where David Giroux has made small
adjustments to asset allocation while following a
high-quality strategy on the equity side. The fund has
been a consistent outperformer with enough caution
to limit the downside.
Vanguard landed nine funds on the list. Besides its
trio from Primecap, its allocation funds from
Wellington deserve a mention.
Vanguard Wellesley
Income
VWINX
and
Vanguard Wellington
VWELX
provide professional management at such low prices
that you get close to indexlike costs along with the
stability that these well-run balanced funds provide.
In
2008
, Vanguard Wellesley lost just
9
.
8%
and
Wellington lost
22
.
3%
—both much less than their
category peers. Yet they’ve also outperformed in
the ensuing years.
Vanguard Selected Value
VASVX
is a bolder fund
run in a deep-value style by seasoned managers.
I wouldn’t buy it for downside protection as much as
excellent stock selection at a low price of
0
.
38%
.
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