13
Morningstar FundInvestor
October
2013
Leaders
Morgan Stanley Focus Growth
AMOAX
This fund gained
31
.
5%
for the year to date, better
than
98%
of its large-blend peer group. Manager
Dennis Lynch and team hold a concentrated portfolio
of about
30
stocks, focusing on companies with
dominant market positions and a history of generat-
ing high returns on capital.
The fund’s returns can be volatile, though they’ve re-
warded patient shareholders. The fund’s strong
returns since the start of the year stem from a hefty
stake in resurgent Internet stocks such as
Facebook
FB
and
Groupon
GRPN
and a stake in
Tesla
TSLA
,
which has returned more than
470%
this year.
Artisan International Value
ARTKX
This closed fund has outpaced nearly all foreign large-
blend category peers during the trailing three-, five-,
and
10
-year periods. Managers David Samra and Dan
O’Keefe seek companies with low debt levels trading
at a discount to their private market value.
The fund’s category-leading
21
.
8%
return thus far in
2013
has been fueled by a variety of tech firms,
including electrical connector manufacturer
TE Con-
nectivity
TEL
and Chinese search engine
Baidu
BIDU
. However, the stock market’s runup has left the
managers with a shortage of companies that meet
their valuation criteria. The fund’s cash stake rose to
its all-time high of more than
11%
as of mid-
2013
.
FMI Focus
FMIOX
This small-blend fund’s
31
.
9%
return for the year beats
most category peers. The fund has benefited from
stock selection in the consumer cyclical sector, as mar-
keting firm
MDC Partners
MDCA
and apparel
manufacturer
Fifth & Pacific Companies
FNP
have
posted triple-digit returns this year.
Laggards
Dreyfus Appreciation
DGAGX
This fund is lagging because of its long-term commit-
ment to energy stocks. Its
20%
allocation to energy
firms was nearly double the S
&
P
500
Index’s weight-
ing as of July
2013
. That overweighting, coupled with
poor energy stock selection, has served as a head-
wind in
2013
. The fund’s
11
.
7%
return for the year to
date lags nearly all large-blend peers, with holdings
such as
Royal Dutch Shell
RDS
.A in negative terri-
tory for the year.
Virtus Foreign Opportunities
JVIAX
The fund’s
3
.
8%
return this year lags its typical foreign
large-growth peer’s returns by roughly
8
percentage
points. An overweighting to the consumer defensive
sector held the fund back, as picks such as
Unilever
UL
delivered lackluster returns. An outsized stake in
Indian firms such as
Housing Development Finance
Corp
HDFC
also weighed on returns. Finally, the fund
suffered from a stake in gold miners, with holdings
such as
Goldcorp
GG
detracting from performance.
T. Rowe Price Small-Cap Value
PRSVX
An allocation to flagging mining firms also weighed
on this small-blend fund’s performance in
2013
, while
energy firms such as
Northern Oil & Gas
NOG
and
coal producer
Cloud Peak Energy
CLD
also chipped
away at returns. The fund’s defensive nature has
caused it to lag in most rallies, though recent perform-
ance has been particularly pronounced: The fund’s
21%
return this year lagged nearly
90%
of peers.
The fund is in the midst of a transition. Preston Athey
is retiring, and David Wagner will take over in June
2014
. Wagner became a comanager on Sept.
30
,
2013
.
Transitions like this one have usually been quite
smooth at T. Rowe.
œ
Contact Flynn Murphy at
Ten Worst-Performing Funds
Fund Name
YTD Cat Rank %
Royce Low Priced Stock Sv 99
Amana Growth Investor
98
First Eagle US Value A 98
Hussman Strategic Total R 98
PIMCO Inflation Response 98
Schneider Small Cap Value 98
ASTON/Montag & Caldwell G97
Appleseed
97
Fidelity Export & Multina 97
Madison Mid Cap Y
97
Ten Best-Performing Funds
Fund Name
YTD Cat Rank %
American Funds Trgt Date 1
Artisan International Val
1
Berwyn Income
1
Fairholme Focused Income 1
Fidelity Municipal Income 1
Oakmark International I
1
PIMCO Fundamental Advtg A 1
T. Rowe Price Media & Tel
1
Vanguard Capital Value In 1
Vanguard Precious Metals 1
Dennis Lynch Having a Strong 2013
Leaders & Laggards
|
Flynn Murphy
