(PUB) Investing 2016

Lower-Risk Investments

Value Without Much Energy or Materials

Value funds have been hit across the board, but those

with meaningful energy and basic-materials

stakes have been hit hardest. That’s a little scary as it

is tough to call the bottom, especially with growth

in China slowing. So, in the less-risky bucket I’ll add

value funds that don’t have much in those areas.

Artisan Global Value

ARTGX

This recently reopened fund is one of the better ways

to take advantage of bargains in the value sphere.

Managers David Samra and Dan O’Keefe look for turn-

arounds with healthy balance sheets. They seek

companies with high returns on capital that are trading

at discounts to their private market value. Today,

they have only

in energy but a huge

40%

financials

weighting. That’s a bold move, but they did a great

job of avoiding banks in

2008

because they were wary

of leverage, among other things. The fund had its

first year of underperformance in

2015

, and that led to

some outflows, so they reopened the fund in the fall.

Dodge & Cox Global Stock

DODWX

Dodge

Cox Global Stock is a more conventional take

on value investing. Its managers are patient value

investors buying stocks when they suffer from bouts

of unpopularity and waiting for them to rebound.

The fund’s

energy weighting and

materials

weighting are about in line with the category and

benchmark, as are most of its sector weightings. It is

a little more adventurous in emerging markets

where it owns a

14%

weighting versus

for the peer

group. That has held it back lately. On the plus side,

it has some of the lowest fees in the category.

Sound Shore

SSHFX

This fund shows that focused portfolios don’t have to

be high-risk. Management only owns

stocks,

but it limits stock weightings to no more than

. It

also avoids deep-value stocks, which tend to be

higher risk/higher reward. Rather, it favors stocks that

have shown some signs of recovery and have strong

competitive positions. The end result is a fairly consis-

tent portfolio and performance. Its desire for com-

panies with competitive positions has led it away from

materials and energy and into financials, tech, and

Where to Invest in 2016 and Beyond

Continued From Cover

My Favorites for 2016

Name

Ticker