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Morningstar FundInvestor
January 2
015
Leaders
T. Rowe Price Capital Appreciation
PRWCX
This fund has outperformed at least
87%
of its
moderate-allocation peers in each of the past six
calendar years. Winners in
2014
included
Allergan
AGN
, which nearly doubled in value during the
year,
PG&E
PCG
, and
UnitedHealth Group
UNH
.
The fixed-income portfolio, which takes about
25%
of assets, also did well. Lead manager David Giroux
had avoided Treasuries for years but bought some
at the end of
2013
and sold that stake down in
2014
as it rallied. Meanwhile, a
9%
cash allocation
weighed on results.
Western Asset Core Plus Bond
WACPX
Western Asset Core Plus Bond’s
7
.
7%
return in
2014
outpaced
97%
of its intermediate-term bond com-
petitors’ and easily topped the Barclays U.S. Aggre-
gate Bond Index’s
6%
gain. A contrarian bet to
increase duration exposure at the start of the year
boosted results. Stakes in nonagency mortgage
securities and investment-grade corporate bonds also
helped returns though most of the year. The fund
had a poor showing in
2008
, but the management
team made a number of improvements to its invest-
ment process, and the fund has outperformed its
typical competitor in every calendar year since
2009
.
Fidelity Growth Company
FDGRX
This fund has finished in the top quartile of its
large-growth peer group in each calendar year since
2009
. Longtime lead manager Steve Wymer favors
companies in fast-growing industries with distinctive
products, which has led to a heavy allocation to
the health-care sector. Biotech, which currently takes
16%
of assets, has played a huge role in the fund’s
outperformance over the past three years. A position
in
Keurig Green Mountain
GMCR
and airline picks
also propelled returns in
2014
.
Laggards
Buffalo Small Cap
BUFSX
Buffalo Small Cap’s
6
.
6%
loss in
2014
puts it in the
small-growth category’s bottom decile. A couple
of stocks halved in value, and many others suffered
double-digit losses. Several of the fund’s worst
performers during the year were among the biggest
gainers in
2012
and
2013
, such as
Financial Engines
FNGN
and
Chart Industries
GTLS
. While the
managers have trimmed some of those positions, for
the most part they’ve held tight.
American Funds New Economy
ANEFX
This fund’s
4
.
6%
return in
2014
was a decent absolute
showing, though its typical large-growth rival gained
more than twice that much. The managers have the
flexibility to look throughout the globe and across
the market-cap spectrum; thus, the portfolio currently
holds
28%
of assets in foreign stocks, and its
$23
billion average market cap is in the bottom decile of
the large-growth category. That positioning weighed
on results this year, as U.S. stocks outperformed
foreign equities and large caps trounced small caps.
Nonetheless, the managers boast a strong long-
term record.
Matthews China
MCHFX
This fund lost
4
.
4%
in
2014
, underperforming its
typical China-region peer by nearly
6
percentage
points and marking the third-consecutive calendar
year of below-average results. In
2014
and over the
trailing three years, generally poor stock selection
and minimal exposure to Taiwan weighed on results.
Moreover, a bias toward growing companies has
consistently led to an underweighting in financials
and an overweighting in consumer companies,
which hindered results in
2014
as the former has
rallied and the latter has struggled.
œ
Contact Leo Acheson at
leo.acheson@morningstar.comTen Worst-Performing Funds
Fund Name
YTD Cat Rank %
Fairholme
99
GoodHaven
99
Janus Overseas T
99
Longleaf Partners Interna 99
Baron Opportunity Retail
98
Delafield Fund
98
FPA Capital
98
Fairholme Focused Income 98
Artisan Small Cap Value I
97
CGM Focus
97
Ten Best-Performing Funds
Fund Name
YTD Cat Rank %
FPA Perennial
1
Fidelity Capital & Income
1
Meridian Small Cap Growth 1
PRIMECAP Odyssey Aggressi 1
Tweedy, Browne Global Val
1
Vanguard Capital Opportun 1
Vanguard GNMA Inv
1
Vanguard Long-Term Invest 1
Vanguard PRIMECAP Core In 1
Vanguard PRIMECAP Inv
1
Another Strong Year for T. Rowe Price
Capital Appreciation
Leaders & Laggards
|
Leo Acheson