22
We are adding
Becker Value Equity
BVEFX
to the
Morningstar
500
. The
4
-star large-value fund has
outlegged the average large-value fund and the S
&
P
500
since it was launched in November
2003
. Man-
agement’s emphasis on quality value has enabled the
fund to hold up well in downturns while still pro-
ducing respectable returns in rallies. The fund has a
small asset base but charges a modest
0
.
93%
ex-
pense ratio. It’s run by Patrick Becker Jr., Stephen
Laveson, Micheal McGarr, Robert Schaeffer, and Mar-
ian Kessler. The first four have been listed as
managers since inception, while Kessler became
comanager in
2005
.
To make room, we’re taking out
Brandywine
BRWIX
.
As noted earlier in the issue, this Neutral-rated
fund continues to disappoint, and it has seen a huge
exodus of shareholders.
Ratings Changes
We lowered the rating of
FPA Paramount
FPRAX
following a shift in strategy and management. The
fund is moving from a global growth strategy to
a global value strategy. In addition, its two longtime
lead managers, Eric Ende and Steve Geist, will
step down. Recent additions Greg Herr and Pierre Py
will take the helm. Given Herr and Py’s limited record,
we have lowered our rating to Neutral from Silver.
In addition, it’s worth noting that
FPA
has warned the
change may result in a sizable capital gains payout as
the new lead managers overhaul the portfolio.
Meantime, we have raised our rating on
FMI Focus
FMIOX
. We’ve warmed up to this Milwaukee-based
fund and its disciplined approach. Manager Rick Lane
recently hit his
15
-year mark at the fund and the
current
15
-year return is a sparkling
13
.
5%
annualized.
That’s a nice recovery from a bump in the road the
fund hit around
2003
, when assets surged to $
1
.
2
billion, prompting the fund to close. The fund may
have waited too long, and it lagged for an extended
stretch. That slump led to outflows, a reopening,
and a rebound in returns.
The fund is now around $
800
million, and Lane vows
to close in a timely fashion in order to avoid a repeat
of
2003
.
Silver Rating for Greenspring
We’ve issued our first rating for
Greenspring
GRSPX
,
and it’s Silver. The fund is two parts caution and one
part aggression. It owns small-value stocks and short-
term high-yield bonds. It’s a formula that generally
has provided admirable risk-adjusted returns.
The fund’s
15
-year returns of
7
.
4%
annualized place
it in the top decile of moderate allocation. In
2008
,
its
11
.
7%
loss was in the top
2%
of the category. It
lagged in the
2009
rally, but that’s still a welcome
trade-off. Manager Charles Carlson has been running
the fund since
1987
. See the facing page for
more details.
We rated
Vanguard FTSE Social Index
VFTSX
Bronze for its low costs and its improved benchmark.
We started
Vanguard Growth & Income
VQNPX
at Neutral because we don’t see the case for it versus
Vanguard
500
Index
VFINX
.
œ
Summary of Changes
Add
Drop
Becker Value Equity BVEFX
Brandywine BRWIX
Rating Change
To
From
FPA Paramount FPRAX
‰
None
FMI Focus FMIOX
• ´
New Ratings
Vanguard FTSE Social Idx Inv VFTSX
´
Greenspring GRSPX
•
Vanguard Growth & Inc Inv VQNPX
‰
An Upgrade for FMI Focus and a
Downgrade for FPA Paramount
Changes to the 500
|
Russel Kinnel
What is Morningstar
FundInvestor
500
?
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500
features the industry’s
best and most notable funds.
Use the list to get new
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the funds you already own.
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subscribers have
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reports on all 500 funds on
mfi.morningstar.com. Just type
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