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Morningstar FundInvestor
August 2015
Leaders
Matthews Asia Dividend Investor
MAPIX
Despite the wild swings in China, Matthews Asia
Dividend Investor, with a Morningstar Analyst Rating
of Silver, has shone. The recently reopened, diversi-
fied Asia-Pacific Japan fund has rewarded investors
over the short- and longer-term through an atypical
approach that involves significantly differing country
and sector weightings from its average peers and
the
MSCI AC
Asia Pacific Index. Thus far this year,
the fund has outperformed the category through
strong stock selection in Japan (where it has an over-
weighting relative to peers), China, and other markets.
The fund has topped more than
90%
of category
peers since the start of
2015
.
Hotchkis & Wiley High Yield
HWHAX
Bronze-rated Hotchkis
&
Wiley High Yield’s relatively
compact portfolio devotes about half of its assets
to bonds issued by smaller- and mid-cap firms that are
less closely followed. Strong bond-picking and
positive credit selection have led the domestic high-
yield bond fund ahead of
85%
of peers since the
start of the year. Its two highest-weighted sectors,
energy and basic industry, have posted particularly
strong performance.
Wasatch Core Growth
WGROX
Silver-rated Wasatch Core Growth has continued
to deliver terrific performance relative to peers,
returning about
10%
so far this year. The fund has
beaten
72%
of its peers thus far in
2015
, driven by
especially strong stock-picking in the information
technology and financials sector. Strong contributors
have been major holdings
Credit Acceptance
CACC
and
Tyler Technologies
TYL
. That stock-
picking more than offset an overweighting in the
hard-hit transportation sector.
Laggards
BBH Core Select
BBTEX
Since the start of
2015
, the fund has trailed nearly
four out of every five of its large-blend peers. One of
its largest holdings,
Berkshire Hathaway
BRK
.A,
struggled despite no notable downside catalyst, while
fundamentals weighed on other detractors, including
Bed Bath & Beyond
BBBY
and
Qualcomm
QCOM
.
IVA Worldwide
IVWAX
Silver-rated
IVA
Worldwide has trailed more than
60%
of its world-allocation peers since the start of
2015
.
Its managers hew to a cautious approach that has
served this fund well at times. However, a large
cash stake—
36%
of the fund—has been a drag on
the fund this year, as the fund’s managers think
equities are fully valued in most regions and don’t see
gold as cheap. Stock selection also has been a
culprit, as several U.S. names, including
DeVry
DV
,
Berkshire Hathaway,
News Corp.
NWSA
, and
Oracle
ORCL
, and one Japanese holding, Astellas
Pharma, have weighed on performance. Top-
10
holding DeVry has been hurt by the slowdown in the
for-profit education sector and a Federal Trade
Commission investigation.
Franklin High-Yield Tax-Free Income
FRHIX
This Silver-rated high-yield muni fund has posted
middling performance over the past several years and
has trailed more than
85%
of its category peers
since the start of the year. An investment in Puerto
Rico’s bonds likely hurt the fund.
Oppenheimer Gold & Special Minerals
OPGSX
This fund is down a brutal
26%
for the year to date,
placing it near the bottom of its peer group. It illus-
trates just how rough things have been for those
investing in gold or gold miners. This fund’s emphasis
on smaller gold producers makes it even more
exposed to the price of gold than most of its peers.
The smaller firms tend to have extreme rallies when
gold surges and extreme declines in a sell-off.
K
Ten Worst-Performing Funds
Fund Name
YTD Cat Rank %
FPA Perennial
100
Delafield Fund
99
FPA Capital
99
GoodHaven
99
Janus Contrarian T
99
Longleaf Partners
99
Loomis Sayles Investment
99
Royce Special Equity Mult 99
AMG Yacktman Focused Serv 98
AMG Yacktman Service
98
Ten Best-Performing Funds
Fund Name
YTD Cat Rank %
Fairholme Focused Income 1
Fidelity Overseas
1
Morgan Stanley Inst Growt
1
PIMCO Investment Grade Co 1
Scotia Dynamic U.S. Growt
1
Sequoia
1
T. Rowe Price Capital App 1
T. Rowe Price Media & Tel
1
Thornburg Value A
1
ASTON/Montag & Caldwell B 2
Matthews Asia Dividend Is Holding Up
Quite Well
Leaders & Laggards
|
Robert Goldsborough