22
I am adding three very different funds to the
500
.
First, there is Gold-rated
FMI Common Stock
FMIMX
,
which is closed to new investors. I hesitate to add a
fund that’s already closed, but I received a number of
requests from subscribers to add the fund. It’s an
excellent mid-blend fund run by Pat English and Andy
Ramer. It closed at the end of
2009
when assets
were $
890
million; assets are now $
1
.
3
billion. English
has been with the fund since its
1997
inception.
Bronze-rated
T. Rowe Price Overseas Stock
TROSX
has risen, in our view, as Ray Mills builds a track
record. He has been on the fund since its
2006
incep-
tion, and it has proved to be a consistent performer.
It has outperformed its peers by a modest amount in
each of the past five years. Mills employs a patient
value-leaning strategy. His diversified portfolios and
more-moderate performance signal that the fund is
best owned by those who value consistency over the
return potential of a more focused fund. The fund
has $
6
.
3
billion in assets and a low
14%
turnover rate.
Its top country weightings are the United Kingdom
23%
and Japan
20%
.
Finally, I’m adding Silver-rated
American Funds
Target Date Retirement 2020
AACTX
. The fund
captures all of American Funds’ strengths and weak-
nesses. You get strong stock selection and low costs,
which make for a good retirement-fund package.
However, American’s bond funds are mediocre, so
that keeps their target-date funds a notch below
those offered by T. Rowe Price and Vanguard. See
the facing page for more details.
Three Go Out
Leuthold Asset Allocation
LAALX
is being merged
into
Leuthold Core Investment
LCORX
, so it leaves
the
500
. We rate Leuthold Core Investment Bronze.
With a new manager and strategy,
FPA Paramount
FPRAX
also departs. See Manager Changes on Page
14
for more details.
Finally, the disappointing and shrinking
Muhlen-
kamp Fund
MUHLX
has been dropped from coverage
and is leaving the Morningstar
500
.
Keep an Eye on Taxes
Five years into the stock market rally, it’s likely that
more funds will distribute capital gains in December.
Typically, fund companies post their first estimates
of expected capital gains in early November. If you
are buying in a taxable account, be sure to check
the fund company website or call to see if it has an
estimate of capital gains.
œ
Summary of Changes
Add
Drop
American Funds Trgt Date Ret 2020 Muhlenkamp
T. Rowe Price Overseas Stock
FPA Paramount
FMI Common Stock
Leuthold Asset Allocation
Rating Change
To
From
Calamos Convertible
‰ ´
Columbia Acorn USA
´
Not Rated
Third Avenue Small Cap Value Inst'l
‰ ´
T. Rowe Price Overseas Joins the 500
Changes to the 500
|
Russel Kinnel
What is Morningstar
FundInvestor
500
?
The Morningstar FundInvestor
500
features the industry’s
best and most notable funds.
Use the list to get new
investment ideas and track
the funds you already own.
FundInvestor
subscribers have
access to one-page monthly
reports on all 500 funds on
mfi.morningstar.com. Just type
in the name or ticker of the
fund in the search box.
