13
Morningstar FundInvestor
September
2013
Leaders
Sound Shore
SSHFX
This large-value fund gained
22
.
8%
for the year to
date, better than more than
95%
of its peer group.
The management team looks for mid- and large-cap
stocks trading at a substantial discount that also
have strong fundamentals and solid competitive posi-
tions within their industries. They tend to keep the
portfolio fairly concentrated with around
40
stocks,
though no single company will typically get more
than
3
.
5%
of assets. Since the beginning of
2013
the
portfolio has had several winners with double-digit
returns, including top holdings
Texas Instruments
TXN
,
Novartis
NVS
, and
State Street
STT
. The
overweighting in health-care stocks also helped as
that sector outperformed.
Greenspring
GRSPX
This fund looks very different from its moderate-allo-
cation peer group, and its category-beating
12
.
3%
return for the year to date speaks to an appealing pro-
cess. While most moderate-allocation funds invest
in large-cap blend or growth stocks, manager Chip
Charlson tends to focus on small- and mid-cap stocks.
On the fixed-income side, the fund buys short-term
high-yield bonds, in contrast to the typical peer’s slug
of intermediate-term investment-grade bonds. This
unusual profile has paid off for the year to date, as
smaller-cap stocks and high-yield bonds have beaten
out large caps and higher-quality issue in that period.
William Blair Small Cap Growth
WBSNX
This fund is up a whopping
32
.
3%
for the year to date
thanks to an eclectic group of fast-growing compa-
nies.
WNS Holdings
WNS
,
CoStar
CSGP
,
Pandora
Media
P, and
Tangoe
TNGO
have been big winners
for the fund. Even within the small-growth group, the
fund favors faster-growing, higher-priced stocks. That
aggressive positioning means the fund is often near
the top or bottom. Including this year, it has been top-
or bottom-decile of its category for five straight
years. Its
10
-year returns are just a hair above the
category average.
Laggards
Janus Overseas
JAOSX
This foreign large-growth fund is near the bottom of
its peer group with a
4
.
5%
loss so far in
2013
.
Manager Brent Lynn’s growth strategy is distinctive.
He is not afraid to add to positions when the stock
is battered because of short-term issues. Lynn also
tends to hold more assets in emerging markets
and smaller-cap names than the typical foreign large-
growth peer, and he is not afraid of sector concen-
tration. The strategy has hurt the fund for the year to
date. The fund’s overweighting to energy and real
estate, as well as to emerging-markets stock in Asia
and Latin America, hurt performance.
Royce Special Equity
RYSEX
This small-cap fund posted a
12
.
7%
return for the year
to date, but it still lands in the bottom decile of its
category. Manager Charlie Dreifus runs a classic value
approach by buying stocks trading at a large dis-
count to his estimates of intrinsic value and empha-
sizing profitability, conservative balance sheets,
and strong free cash flow metrics. Since the begin-
ning of
2013
, the fund has lagged largely because
of con-sumer stock and technology picks that have
declined or lagged in the period.
PIMCO Low Duration
PLDDX
PIMCO
’s short-term bond fund lost
1
.
6%
for the year
to date, worse than
87%
of its category. Manager
Bill Gross uses
PIMCO
’s macroeconomic forecasting
and sector specialist desk to make investment deci-
sions, and he has not been afraid to move the port-
folio around to reflect these views. In particular, the
firm’s macro views led Gross to hold more than the
typical peer in Treasury Inflation-Protected Securities
and emerging-markets debt, both of which suffered
greatly in the bond-market sell-off this past May.
œ
Contact Kailin Liu at
Ten Worst-Performing Funds
Fund Name
YTD Cat Rank %
Amana Growth
99
Royce Low Priced Stock Sv 99
First Eagle US Value A 98
Hussman Strategic Total R 98
Janus Overseas T
98
PIMCO Inflation Response 98
FPA Capital
97
Royce Premier Invmt
97
Royce Value Svc
97
Schneider Small Cap Value 97
Ten Best-Performing Funds
Fund Name
YTD Cat Rank %
Artisan International Val
1
Dodge & Cox Balanced
1
Fairholme Focused Income 1
Fidelity Municipal Income 1
Longleaf Partners Interna 1
Oakmark International I
1
T. Rowe Price Media & Tel
1
Third Avenue Real Estate 1
Vanguard Capital Opportun 1
Vanguard Capital Value In 1
Sound Shore and Greenspring Faring
Well in 2013
Leaders & Laggards
|
Kailin Liu
