13
Morningstar FundInvestor
May 2
013
Leaders
Primecap Odyssey Growth
POGRX
This large-growth fund returned
24
.
98%
over the
past
12
months, beating out all of its category peers.
The managers like quickly growing companies but
tend to buy them when they are temporarily cheap. In
the past
12
months, the fund’s overweighting to
health-care stocks boosted returns as that sector out-
performed. In addition, technology stock picks
pushed the fund ahead of the competition. Top hold-
ings like
Amgen
AMGN
,
Seattle Genetics
SGEN
,
Google
GOOG
, and
Adobe Systems
ADBE
all gained
between
30%
and
90%
.
Ariel Appreciation Investor
CAAPX
This mid-blend fund gained
24
.
51%
in the trailing one-
year period, landing in the top decile of its peers.
Managers John Rogers and Timothy Fidler are funda-
mental value investors who prefer well-managed,
wide-moat firms that are trading at a substantial
discount. The fund is concentrated with
40
or fewer
stocks and tends to have an overweighting in finan-
cials and consumer stocks while underweighting tech-
nology. Although the strategy emphasizes security
selection, sector weightings have actually contributed
more to performance in the past
12
months. The
portfolio’s overweighting to consumer stocks and
health care boosted performance as these sectors
outperformed, and the underweighting to technology
helped as that sector lagged the index.
Loomis Sayles Bond
LSBRX
This multisector-bond fund posted
12
.
28%
gains in the
past
12
months, beating out
84%
of its category
peers. The management team, led by Dan Fuss, takes
a deep-value approach to bond investing and fo-
cuses especially on corporate bonds. The managers
also have flexibility to hold up to
35%
in high-yield
bonds,
20%
in equities, and up to
20%
in foreign
issuers with no limit on Canadian bonds. In the past
12
months, the fund’s high stake in corporate bonds
and
BBB
rated issues boosted returns as that
bond sector and
BBB
rated issues outperformed. The
portfolio’s position in Ireland, homebuilders,
financial-services companies, convertibles, and
equities also helped.
Laggards
Columbia Acorn International
ACINX
It gained
16
.
59%
in the trailing
12
months but still fin-
ished behind
72%
of its peers and
2
percentage
points behind the category average. Managers Zach
Egan and Louis Mendes buy small companies with
high growth rates and mitigate potential volatility by
focusing on strong fundamentals and taking care
to diversify across more sectors and individual stocks.
In the past
12
months, underperforming stock picks
in the industrials, consumer defensive, and basic-
materials sectors, as well as a modest underweighting
to the eurozone, held back performance here.
Vanguard LifeStrategy Income
VASIX
This fund returned
6
.
13%
in the past
12
months, worse
than
78%
of its conservative-allocation peers. This
fund of funds invests
80%
in a clone of
Vanguard
Total Bond Market Index
VBTLX
,
14%
in
Vanguard
Total Stock Market Index
VTSAX
, and
6%
in
Vanguard Total International Stock Market Index
VTIAX
. The fund has less exposure to equities,
corporate bonds, and higher-quality bonds than the
typical conservative-allocation fund. This held back
performance in the past
12
months as stocks out-
performed bonds, corporates outperformed govern-
ment and asset-backed securities, and lower-quality
issues outperformed investment-grade bonds.
First Eagle U.S. Value
FEVAX
This large-blend fund returned
9
.
91%
in the trailing
one year, landing squarely in its category’s basement.
The management team values capital preservation
above all. It selects stocks and corporate bonds by cal-
culating intrinsic value and then only buys with a
significant margin of safety. The portfolio holds a sub-
stantial portion in cash; in May
2012
, it held around
20%
in cash. The high cash stake hurt performance,
and an underweighting to the strongly performing
health-care stock sector didn’t help either.
œ
Ten Worst-Performing Funds
Fund Name
YTD Cat Rank %
Delafield Fund
100
Dynamic US Growth I
99
FPA Capital
99
Hussman Strategic Total R 99
Permanent Portfolio
99
Royce Low Priced Stock Sv 99
Royce Micro-Cap Invmt
99
Calamos Growth A
98
First Eagle US Value A 98
RiverPark/Wedgewood Retai 98
Ten Best-Performing Funds
Fund Name
YTD Cat Rank %
ClearBridge Aggressive Gr
1
Invesco Equity and Income 1
PRIMECAP Odyssey Aggressi 1
PRIMECAP Odyssey Growth 1
Vanguard Capital Opportun 1
Vanguard PRIMECAP Inv
1
William Blair Small Cap G 1
Fairholme Focused Income 2
PIMCO Fundamental Advtg A 2
Vanguard Precious Metals 2
Primecap and Ariel Funds Going Strong
Leaders & Laggards
|
Kailin Liu
