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13
Morningstar FundInvestor
March
2015
Leaders
Davis Financial
RPFGX
A recent makeover has served this fund well, contrib-
uting to a
15%
return over the past
12
months.
Manager Chris Davis succeeded Ken Feinberg in
late
2013
; seeing relatively attractively valued finan-
cials stocks, Davis decided to shed some nonfinan-
cials from this fund’s portfolio in favor of regional
banks and insurers. Davis’ long tenure with the firm
includes comanaging this fund from
1991
to
2007
and working alongside Feinberg.
Matthews Pacific Tiger
MAPTX
This Gold-rated large-growth Asia stock fund long has
offered superior risk-adjusted returns. The past
12
months has been no exception, as the closed fund
returned
20%
even as emerging Asia’s markets have
posted mixed results. Manager Sharat Shroff and
comanagers have done a fine job of uncovering strong
and sustainable growers selling at moderate valua-
tions, and they’re comfortable with sector and country
weightings that deviate meaningfully from other
Pacific/Asia ex-Japan funds and from this fund’s
benchmark. Over the past
10
years, this fund has
topped
90%
of competitors in its category.
Vanguard Long-Term Investment-Grade
VWESX
A bond rally has helped long-duration funds, including
this one, over the past
12
months. Managers from
subadvisor Wellington and from Vanguard’s own
fixed-income group select highly interest-rate-sensi-
tive, long-dated bonds for this Bronze-rated fund.
Investors should note two aspects of this fund. First,
its defining feature is its long average duration of
13
.
7
years, which is above its current category. Second,
head manager L.T. Hill hews reasonably closely to the
fund’s index, with sector allocations normally
remaining within
10%
of the benchmark.
Laggards
Longleaf Partners International
LLINX
This Bronze-rated fund bested
96%
of the peers in its
foreign large-blend category in
2013
only to turn
around and return negative
15%
in
2014
and negative
13%
the
12
months ended February, placing it in the
cellar of its category. Seesaw-like performance hasn’t
been uncommon for Longleaf Partners International,
which performed nicely in
2010
and
2012
but endured
a dismal
2011
. The most recent underperformance
has been caused by depressed iron ore prices amid
lower Chinese demand, which hurt large positions
in Brazilian iron ore company Manabi and Australian
mining services firm Mineral Resources.
T. Rowe Price International Bond
RPIBX
A strong dollar has been a major headwind for this
Neutral-rated fund, which has a nearly
100%
exposure
to overseas currencies. Some of its competitors in
the world-bond category hedge all or part of their
foreign-currency exposure. Although this high-quality
fund can be a fine way to diversify U.S.-centric
portfolios, it lags gutsier bond funds when credit leads
the way or when the dollar surges. Over the longer
term, this fund’s results are uninspired even when
compared with peer funds that exclude U.S. debt and
don’t hedge currency exposure. Looking ahead,
manager Arif Husain has his work cut out for him.
Buffalo Small Cap
BUFSX
Although this Bronze-rated fund historically has
posted good relative returns in both up and down
markets, it struggled in
2014
, returning negative
6
.
55%
and lagging
95%
of small-growth peers as
some previous successes, such as
Financial
Engines
FNGN
and
Chart Industries
GTLS
, fizzled.
Over the past
12
months, the fund is off
3
.
9%
. The
fund’s managers scour the landscape for fast-growing
small caps that will benefit in a three- to five-year
period from long-term trends. With a long-term focus,
they hold tight with positions, despite volatility.
œ
Contact Robert Goldsborough at:
robert.goldsborough@morningstar.comTen Worst-Performing Funds
Fund Name
YTD Cat Rank %
Dodge & Cox Balanced
99
FPA Perennial
99
GoodHaven
99
Greenspring
99
Janus Overseas T
99
Loomis Sayles Bond Retail
99
AMG Yacktman Focused Serv 98
AMG Yacktman Service
98
Delafield Fund
98
FPA Capital
98
Ten Best-Performing Funds
Fund Name
YTD Cat Rank %
Artisan Value Investor
1
Century Small Cap Select
1
Fairholme Focused Income 1
JOHCM International Selec 1
Oakmark International Sma 1
Bogle Small Cap Growth In 2
Fidelity Capital & Income
2
Franklin Mutual Beacon A 2
Harbor Commodity Real Ret 2
Longleaf Partners Small-C 2
Davis and Matthews Funds Break Out
Leaders & Laggards
|
Robert Goldsborough