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Morningstar FundInvestor
May 2016
Leaders
Artisan Value
ARTLX
has outperformed all but two of
its peers for the year to date through April. That’s
a welcome rebound for the fund, as it had trailed more
than
90%
of its large-value peers in the past three
calendar years. The fund’s large overweighting to energy
and basic materials hurt performance in the past but
drove results this year as commodity prices rose. Big
contributors to performance included energy firms
Apache
APA
and
Hess
HES
and gold-miners
Kinross
Gold
KGC
and
Goldcorp
GG
—all four are up more
than
20%
this year. The team’s focus on firms with
strong balance sheets also worked against it in past
years but paid off in
2016
amid market volatility,
as holdings such as
Berkshire Hathaway
BRK
.B and
Allstate
ALL
posted strong returns.
Bronze-rated
First Eagle Overseas
SGOVX
has
excelled in
2016
, outperforming
99%
of its foreign
large-blend peers for the year to date. The fund’s
heavy weighting in cash—currently around
15%
—
along with a perennial stake in gold bullion and
the managers’ focus on valuation all helped it outper-
form amid
2016
’s market volatility. The fund also
has an underweighting in hard-hit financials, and
those that it does own—such as
HAL Trust
HAL
and
Great Eagle Holdings
—have done well.
Neutral-rated
Fairholme Focused Income
FOCIX
has
outperformed
99%
of its high-yield bond peers in
2016
.
Manager Bruce Berkowitz makes concentrated bets
and has a preference for distressed bonds, so this fund
offers plenty of risk. The fund’s bets have recently
paid off—although they have long been sources of
pain—as its large stake in Fannie Mae and Freddie
Mac preferreds, its Chesapeake Energy bonds, con-
vertibles, and preferreds, and its position in
Seritage
Growth Properties
SRG
have all done well.
Laggards
Silver-rated
Fidelity Low-Priced Stock
FLPSX
has
lagged
95%
of its mid-cap value peers thus far in
2016
.
Large overweightings in consumer discretionary and
technology have hurt results relative to peers. Data
storage firm
Seagate Technology
STX
and consumer
discretionary firms
Next
NXT
,
Barratt Developments
BDEV
, and
Bellway
BWY
have all declined more
than
14%
this year.
Bronze-rated
Matthews China
MCHFX
has trailed
99%
of its China-region peers for the year to date.
Lead manager Andrew Mattock’s focus on firms with
robust long-term earnings prospects that will
benefit from Asia’s rising income levels has led to
an overweighting in consumer discretionary and
industrials. Unfortunately, those sectors have been
hit hard this year as investors have grown more
concerned about China’s future growth prospects.
Some of the fund’s largest holdings, including online
retailer
JD.com
JD
, auto manufacturer
Chongqing
Changan Automobile
, and electrical distributor
Boer
Power
, have all lost more than
20%
.
Bronze-rated
PIMCO Low Duration
PLDDX
has lagged
87%
of its short-term bond peers in
2016
. Comanagers
Scott Mather and Jerome Schneider focus on the
short end of the yield curve and have the freedom to
invest in traditional core sectors—government debt
and investment-grade debt—as well as high-yield debt
and emerging-markets debt. The team’s decision to
shorten the fund’s duration has proved costly recently,
as global economic stagnation spurred a bond rally.
K
Contact Andrew Daniels at
andrew.daniels@morningstar.comTen Worst-Performing Funds
Fund Name
YTD Cat Rank %
Matthews China Investor 100
Scotia Dynamic U.S. Growt 99
Sequoia
99
Touchstone Sands Capital
99
Fidelity OTC
98
Janus Contrarian T
97
Natixis ASG Global Altern 97
Templeton Global Bond A 97
Artisan International Sma 96
Baron Opportunity Retail
96
Ten Best-Performing Funds
Fund Name
YTD Cat Rank %
Artisan Value Investor
1
Champlain Mid Cap Adv
1
Fairholme Focused Income 1
First Eagle Overseas A
1
First Eagle US Value A
1
GoodHaven
1
Jensen Quality Growth J
1
Longleaf Partners
1
Longleaf Partners Interna 1
Longleaf Partners Small-C 1
Artisan Value Rebounds Strongly
Leaders & Laggards
|
Andrew Daniels