13
Morningstar FundInvestor
July 2
013
Leaders
FPA Perennial
FPPFX
This mid-growth fund gained
28
.
06%
in the past
12
months, beating out
96%
of its category peers.
Managers Eric Ende and Steve Geist buy high-quality
small- and mid-cap stocks with high returns on capital,
as well as low debt and healthy potential growth,
and prefer to do so at a reasonable price. Their selec-
tivity results in a concentrated portfolio of fewer than
40
stocks. The managers are also benchmark-agnostic,
so assets can pool in a few sectors. In the past few
months, the fund has benefited more from stock
selection than sector weights. Several top holdings
like
CarMax
KMX
,
Signet Jewelers
SIG
, and
Wabco Holdings
WBC
have posted returns north of
40%
in the past
12
months.
Artisan International Small Cap
ARTJX
This foreign small/mid-growth fund landed comfort-
ably in the top decile of its category with a
30
.
54%
gain over the trailing one-year period. Lead manager
Mark Yockey and his team buy fast-growing (some-
times-pricey) companies, high-quality stable growth
names, and value buys. Yockey and his team have
also tended to focus on small caps more exclusively
than peer funds. In the past
12
months, the fund
benefited from excellent picks, especially in the
consumer defensive sector. International food and
drink companies like Glanbia, Super Group, and
Calbee all returned more than
50%
in the past
12
months.
Fairholme Focused Income
FOCIX
This high-yield fund smoked its category with a
22
.
94%
gain for the past
12
months. Manager Bruce
Berkowitz runs a highly concentrated portfolio
of distressed debt. His picks are bold, but he doesn’t
scrape the barrel; picks should have enough liquida-
tion value to cover their debts, as well as a path to
financial health. This bold strategy has caused vola-
tile performance in the past, but in recent months its
concentration has helped. The portfolio’s high stake
in
MBIA
bonds pushed fund performance to the top of
its category in May
2013
when
MBIA
won a $
1
.
7
billion settlement with
Bank of America
BAC
.
Laggards
Domini Social Equity
DSEFX
This socially conscious large-blend fund landed in
the bottom decile of its peer group with a
14
.
70%
return for the trailing one-year period. A quantitative
team at Wellington Management subadvises the
fund and chooses from a universe of stocks that pass
the standards committee at Domini Social Invest-
ments. Wellington’s team creates a model to over-
weight or underweight acceptable stocks relative
to the S&P
500
, while remaining within
3
.
0
percen-
tage points of the index’s sector weighting and
within
1
.
5
percentage points of the index’s individual
stock weightings. In the past
12
months, the fund
has suffered from underperforming stock picks in the
consumer cyclical, real estate, and technology sectors.
Hussman Strategic Total Return
HSTRX
This conservative-allocation fund lost
7
.
71%
, almost
15
percentage points worse than the category ave-
rage. Manager John Hussman uses historical price
trends, trading volume, and valuation measures to
select stocks and asset classes. The resultant port-
folio is dramatically different from its typical peer:
In the past, the fund has tended to keep
50%
–
60%
of
assets in U.S. government securities,
20%
in stocks
(typically precious metals, energy, and utilities), and
the rest in cash. The cash stake, which was between
11%
and
50%
over the past
12
months, kept the fund
from participating in the equity rally. Adding to the
sting was the dismal performance of the fund’s stake
in precious-metal miners. Top holdings like
Agnico
Eagle Mines
AEM
,
Newmont Mining
NEM
, and
Barrick Gold
ABX
lost between
30%
and
60%
.
œ
Contact Kailin Liu at
Ten Worst-Performing Funds
Fund Name
YTD Cat Rank %
Delafield Fund
99
FPA Capital
99
PIMCO Inflation Response 99
Royce Low Priced Stock Sv 99
Amana Growth
98
Appleseed
98
First Eagle US Value A 98
Janus Overseas T
98
Permanent Portfolio
98
Royce Micro-Cap Invmt
98
Ten Best-Performing Funds
Fund Name
YTD Cat Rank %
Artisan International Val
1
ClearBridge Aggressive Gr
1
Fairholme Focused Income 1
Invesco Equity and Income 1
Oakmark International I
1
PRIMECAP Odyssey Growth 1
Third Avenue Real Estate 1
Vanguard Capital Opportun 1
Vanguard Capital Value In 1
Vanguard Precious Metals 1
FPA Perennial Has a Strong 12 Months
Leaders & Laggards
|
Kailin Liu
