13
Morningstar FundInvestor
December
2013
Leaders
American Funds New Economy
ANEFX
This large-growth fund has continued to succeed in
spite of recent headwinds posed by its outsized stake
in international stocks. The fund, which seeks firms
that either create or benefit from innovation, holds
more than one third of its assets in foreign fare, includ-
ing a
7%
stake in Chinese stocks. Despite interna-
tional and emerging markets lagging domestic stocks
in
2013
, this fund’s
39
.
3%
gain for the year through
November tops nearly all category peers. Strong stock
selection powered that gain: Top-three holding
Net-
flix
NFLX
gained more than
295%
so far in
2013
while
Galaxy Entertainment Group
GXYEY
(a casino
and resort operator in Macau) is up more than
90%
.
Ariel
ARGFX
A big slug of consumer cyclical stocks has boosted
this fund’s performance so far in
2013
. Manager John
Rogers and team look to buy troubled firms at steep
discounts, which has led to elevated volatility and
long periods of underperformance in the past. But the
fund’s
39
.
4%
gain this year reaches the mid-blend
category’s top decile. Cyclical holdings such as media
conglomerate
Gannett Company
GCI
and advertis-
ing firm
Interpublic Group
IPG
have fueled returns,
posting
54%
and
61%
gains, respectively, this year
through November.
Dodge & Cox Income
DODIX
This intermediate-term bond fund has managed to eke
out a
0
.
7%
gain during a year when its typical peer
has lost money. By holding roughly half its portfolio in
corporate bonds, and taking a defensive stance
against rising interest rates, the fund stood out from
Treasury-heavy peers and benchmark Barclays
US
Aggregate Bond Index—and held up better than both
in this year’s rising-rate environment.
Laggards
RiverPark/Wedgewood
RWGFX
Despite posting a
26
.
2%
gain through November this
year, this large-growth fund lags
80%
of its peers.
That fits this fund’s history of making good, not great,
gains in rising markets while suffering less in down
markets. The fund’s concentrated portfolio has been
hampered by its technology picks, including top-
holding
Apple
AAPL
, which is up just
7%
this year.
Top-five holding
EMC Corporation
EMC
is in neg-
ative territory this year as the network-storage firm
struggled with disappointing earnings results.
T. Rowe Price Mid-Cap Value
TRMCX
Struggling gold stocks, such as
Newmont Mining
Corporation
NEM
, have weighed on this fund in
2013
. The fund’s
27
.
1%
return through November lags
most mid-value peers and the category average of
31
.
5%
. The fund’s managers follow a patient approach,
adding to positions if prices drop, which can lead
to lumpy returns and periods of short-term pain for
shareholders at times. True to form, the managers
continued to add to the fund’s stake in gold stocks in
mid-
2013
, expecting a more stable supply/demand
picture in the future.
PIMCO Foreign Bond (Unhedged)
PFBDX
This world-bond fund tilts heavily toward debt issued
in Japan, the United Kingdom, and the eurozone. The
fund has been dialing down its exposure to riskier
corporate and emerging-markets fare since early
2012
,
but its emphasis on longer-dated issues left it exposed
during
2013
’s broad bond market sell-off. The fund’s
5
.
6%
loss during the year through November trailed
more than
85%
of peers’.
œ
Contact Flynn Murphy at
Ten Worst-Performing Funds
Fund Name
YTD Cat Rank %
Royce Low Priced Stock Sv 99
Amana Growth Investor
98
Appleseed
98
FPA Capital
98
First Eagle US Value A 98
Virtus Foreign Opportunit
98
American Century Equity I
97
Dreyfus Appreciation Inve 97
Lateef A
97
Permanent Portfolio
97
Ten Best-Performing Funds
Fund Name
YTD Cat Rank %
American Funds 2020 Trgt
1
Artisan International Val
1
Berwyn Income
1
Dodge & Cox Balanced
1
Fairholme Focused Income 1
Oakmark International I
1
T. Rowe Price Media & Tel
1
Third Avenue Real Estate 1
Vanguard Capital Value In 1
Vanguard Precious Metals 1
New Economy Rides to the Top
Leaders & Laggards
|
Flynn Murphy
