(PUB) Investing 2015

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13 Morningstar FundInvestor November 2015
Leaders
Harbor Capital Appreciation HACAX , which has a
Morningstar Analyst Rating of Gold, has had a banner
year in 2015, outperforming some 97% of its large-
growth peers. When growth is in favor, this fund has the
potential to take off. Manager Sig Segalas and his
team favor well-known growth names. Helping to fuel
the fund’s11.5% return this year have been positions
in a rebounding Amazon.com AMZN, Netflix NFLX,
Alphabet GOOGL , Nike NKE, Facebook FB, and
Salesforce.com CRM. Other strong picks have included
Visa V, Mastercard MA, and Priceline PCLN. These
holdings are consistent with Segalas’ preference for con-
sumer-oriented technology and Internet companies.
Vanguard Intermediate-Term Investment-Grade’s
VFICX emphasis on high-quality debt has helped
it this year. The Silver-rated fund’s 2.1% return since
the start of 2015 has bested fully 98% of peers in
the corporate-bond Morningstar Category. Although
the fund can lag its peers and benchmark during
credit rallies, it generally shines during periods where
credit is battered, as was the case earlier this year.
Artisan Global Opportunities ARTRX has done a fine
job this year relative to its world-stock peers. The
Silver-rated fund’s 7.9% return since the start of the
year has been good enough to top 96% of its cate-
gory. Lead manager Jim Hamel has kept the fund’s
foreign stake (42.5% as of the end of September
2015) below the category norm of 49%, which has
helped to benefit this fund as U.S. stocks have out-
performed foreign ones both this year and since this
fund’s 2008 launch. Some of the fund’s winners
this year have been Regeneron Pharmaceuticals
REGN, Electronic Arts EA, Facebook, Alphabet,
Direct Line Insurance Group, and Tencent Holdings.
Laggards
Delafield DEFIX has posted a 12.4% loss, placing it at
the bottom of its mid-value category and extending a
track record that produced weak performance in 2013
and 2014 as well. Managers Dennis Delafield and
Vince Sellecchia favor buying beaten-down small- and
mid-cap firms in various stages of turnaround or
restructuring, but they’ve had their share of misses
lately, including Harsco HSC, Boardwalk Pipeline
Partners BWP, Carpenter Technology CRS, and Wesco
International WCC. One common thread among
many of this concentrated fund’s struggling holdings is
that they’re found in the industrials, basic materials,
and energy sectors, which have been battered this year
by weakness in China, energy price declines, and a
strong dollar.
T. Rowe Price Spectrum Income RPSIX has trailed
almost two thirds of its peers in the multisector-
bond category since the start of 2015. This Bronze-
rated fund of funds allocates tactically to T. Rowe
Price mutual funds that invest in various asset classes,
and the fund’s asset-allocation committee recently
broadened its roster to 15 investable options, including
five Morningstar Medalists. Although this fund
normally does well when credit is weak—as has been
the case this year—its higher-than-average equity
stake (12.5% compared with low single digits for the
category norm) has served as a headwind thus far
this year.
Third Avenue Value TAVFX has struggled in 2015 relative
to the world-stock category, losing close to 4.3% and
trailing more than nine out of every 10 peers. The concen-
trated fund has faced multiple succession issues of
late, but its current-year performance can be explained
more by poor sector weightings, including stakes in
basic materials and energy that exceed the fund’s bench-
mark and its category average. Major detractors this
year have included steelmaker POSCO PKX, energy firm
Devon Energy DVN, senior-living-community operator
Brookdale Senior Living BKD, forest products company
Canfor, energy producer Apache APA, and waste-to-
energy firm Covanta Holding CVA. K
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Ten Worst-Performing Funds
Fund Name YTD Cat Rank %
Delafield Fund 99
FPA Capital 99
GoodHaven 99
Janus Contrarian T 99
Longleaf Partners 99
Loomis Sayles Investment 99
Sequoia 99
Artisan International Inv 98
Royce Micro-Cap Invmt 98
Royce Special Equity Mult 98
Ten Best-Performing Funds
Fund Name YTD Cat Rank %
ASTON/Montag & Caldwell 1
Fairholme Focused Income 1
Fidelity Overseas 1
T. Rowe Price Capital App 1
T. Rowe Price Global Tech 1
T. Rowe Price Media & Tel 1
Vanguard Interm-Term Invm 1
Vanguard Tax-Managed Bala 1
Brown Capital Mgmt Small 2
Clipper 2
Harbor Capital Appreciation Surges
Leaders & Laggards | Robert Goldsborough