13
Morningstar FundInvestor
June 2
013
Leaders
Vanguard High-Yield Tax-Exempt
VWAHX
This intermediate-term muni-bond fund gained
4
.
70%
over the trailing one-year period, better than more
than
95%
of its category. Its portfolio takes more
credit risk than its typical peer because manager Mat
Kiselak invests in lower-quality bonds to gain income.
As of March
31
,
2013
, it held
14%
in
BBB
rated securi-
ties, compared with a
5%
stake for the typical inter-
mediate-term muni fund. Its bolder profile can lead to
more volatility than its typical peer would sustain,
but its stake in credit helped it to shine as low-grade
credits bounced back in
2012
.
CGM Focus
CGMFX
This fund gained
37
.
24%
over the past
12
months,
landing comfortably in the top decile of its peer group
for the period. Manager Ken Heebner runs one of
the category’s boldest strategies. He typically owns
around
20
stocks, trades rapidly (turnover has been as
high as
500%
), and aggressively incorporates macro
themes into the portfolio. He occasionally shorts
securities, such as his huge Treasury short in
2012
and
2013
. The Treasury short benefited it as Treasury
prices fell from mid-
2012
through mid-March
2013
.
Aston/Fairpointe Mid Cap
CHTTX
It posted a
42
.
79%
return over the trailing one-year
period, beating
96%
of category peers. Managers
Thyra Zerhusen, Marie Lorden, and Mary Pierson buy
niche companies with strong growth (ideally from
increasing market share) and less debt that are trad-
ing at a discount. The portfolio is a fairly concen-
trated
40
-
45
stocks. They tend to buy and hold but are
not shy about selling when picks get too big. In the
past
12
months, it has benefited enormously from
stock selection, particularly in the consumer cyclical
and technology sectors. Top holdings like
H&R
Block
HRB
,
Gannett
GCI
, and the
New York Times
Company
NYT
have seen returns north of
50%
.
Laggards
Royce Micro-Cap
RYOTX
This fund has suffered bottom-decile returns for the
past year due in large part to a sizable weighting
in basic materials.
Universal Stainless & Alloy Pro-
ducts
USAP
, for example, has lost
15%
even as the
market has rallied nicely the past year. The materials
bet is one that a few Royce funds have made, and
it has hurt performance at each of them. It means this
fund has a lot of exposure to global economic growth.
Although the U.S. economy has improved in
2013
,
China has been disappointing, and that’s what matters
most in commodities. However, the fund still has
modestly outperformed peers and benchmark alike
since Jennifer Taylor became comanager in
2004
.
PIMCO Inflation Response MultiAsset
PIRMX
This conservative-allocation fund eked out a
1
.
70%
gain in the trailing one-year period, worse than
95%
of all conservative-allocation funds. Manager Mihir
Worah and his team run a distinctive strategy for real
return and inflation protection by investing in U.S.
Treasury Inflation-Protected Securities, commodities,
emerging-markets currencies,
REIT
s, and gold—a far
cry from the large-cap stocks, Treasuries, and corpo-
rate bonds that are frequently found in conservative-
allocation portfolios. The fund’s asset-class break-
down—especially its low weighting in stocks relative
to category peers—means that it will not perform
similarly to most conservative-allocation funds and
will likely lag when stocks rally.
Century Small Cap Select
CSMVX
This fund posted a
18
.
88%
gain in the trailing one-
year period but still landed in its category’s bottom
decile. Manager Lanny Thorndike uses fundamen-
tal research to find which quality-oriented companies
to buy. He splits the portfolio between “core,”
“emerging,” and “opportunistic” for market-leading,
wide-moat companies, companies with more
rapid growth potential, and turnaround plays. Thorn-
dike’s quality bias can mean that the fund lags
in up markets. In the past
12
months, picks in a few
sectors—including consumer cyclical, technology,
and industrials—have lagged.
œ
Ten Worst-Performing Funds
Fund Name
YTD Cat Rank %
FPA Capital
99
Hussman Strategic Total R 99
Royce Low Priced Stock Sv 99
First Eagle US Value A 98
PIMCO Foreign Bond (Unhed 98
PIMCO Inflation Response 98
Permanent Portfolio
98
Royce Micro-Cap Invmt
98
Royce Premier Invmt
98
Delafield Fund
97
Ten Best-Performing Funds
Fund Name
YTD Cat Rank %
ClearBridge Aggressive Gr
1
Fairholme Focused Income 1
Invesco Equity and Income 1
Oakmark International I
1
PRIMECAP Odyssey Aggressi 1
Vanguard Capital Opportun 1
Vanguard Capital Value In 1
William Blair Small Cap G 1
Third Avenue Real Estate 2
Vanguard Precious Metals 2
Aston Fund Posts Big One-Year Return
Leaders & Laggards
|
Kailin Liu
