(PUB) Investing 2016

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13 Morningstar FundInvestor November 2016
Leaders
Bronze-rated Parnassus PARNX has outperformed
83% of its large-growth peers for the year to date.
The fund’s overweighting to strong-performing tech-
nology stocks—amounting to more than 30% of
assets as of September 2016—have contributed to
results. Within tech, the fund’s semiconductor
holdings such as Applied Materials AMAT, Qualcomm
QCOM , and Micron Technology MU are all up more
than 20% this year; navigation technology firm Trimble
TRMB is up nearly 30%. Furthermore, the fund’s
underweighting to consumer cyclicals stocks contrib-
uted to results, and those it does own, such as eBay
EBAY and Belmond BEL , have done well.
Gold-rated Dodge & Cox Global Stock DODWX has
outperformed 96% of its world-stock peers thus far in
2016. The fund was helped by its overweighting to
technology stocks such as hardware firms Corning GLW,
HP HPQ, and NetApp NTAP—all are up more than
25% this year. Strong stock selection in energy and con-
sumer cyclicals also drove returns. Within energy,
contributors included Petroleo Brasileiro Petrobras
PBR.A, which is up more than 200% this year, and
Apache APA. Within consumer cyclicals, top performers
included Time Warner TWX—which recently
announced plans to be acquired by AT&T T—and
Priceline PCLN .
Silver-rated Western Asset Core Plus Bond WACPX has
posted strong results in 2016, outperforming 88% of
its intermediate-term bond peers. The fund’s managers
have done a great job managing duration in the past,
and shortening duration as the year progressed proved
to be a good move. Additionally, the fund’s lack of
exposure to agency mortgages and its overweightings
to high-yield and emerging-markets debt helped drive
results this year.
Laggards
Bronze-rated First Eagle Fund of America FEAFX has
underperformed 97% of its mid-cap-blend peers for
the year to date. The fund has suffered from bad bets in
healthcare. The primary culprit was Valeant Pharma-
ceuticals International VRX, which the fund held until
May 2016 as the stock plummeted. Other detractors
in healthcare include drug manufacturers Allergan AGN
and Teva Pharmaceuticals TEVA and biotech firm
Halozyme Therapeutics HALO—all are down more
than 30% this year. The fund has also been hurt by
subpar stock selection in the industrials sector: Industrial
products firm Pitney Bowes PBI and car rental firm
Hertz Global Holdings HTZ are down double-digits.
Gold-rated Oakmark Global OAKGX has struggled this
year, underperforming 93% of its world-stock peers.
The managers’ value-oriented strategy has led them to
give an overweighting to financials in recent years,
and that has hurt the fund this year as the sector posted
weak results. Banks such as Credit Suisse and Julius
Baer Gruppe are down more than 15% this year. The
fund has also been hurt by its overweighting to poor-
performing auto stocks such as Daimler DAI, Toyota
Motor, and General Motors GM. Furthermore, the
fund has had minimal exposure to the dividend-heavy
consumer defensive, utilities, and communications
sectors—all have posted solid gains as investors contin-
ue to hunt for yield in this low-interest-rate environment.
Neutral-rated Nataxis ASG Global Alternatives GAFAX
has posted poor performance this year, losing 8%
and underperforming 95% of its multialternative peers
through October 2016. The fund’s short exposure to
rallying fixed-income positions and its long exposure to
choppy global equities dragged on results, particu-
larly in early 2016. (We are removing this fund from the
Morningstar 500.) K
Contact Andrew Daniels at
10 Worst-Performing Funds
Fund Name YTD Cat Rank %
Artisan International Sma 100
FPA US Value 100
Matthews India Investor 100
Fidelity Leveraged Compan 99
Sequoia 99
AMG Managers Montag & Cal98
Artisan International Inv 98
Matthews China Investor 98
Scotia Dynamic U.S. Growt 98
Fidelity Independence 97
10 Best-Performing Funds
Fund Name YTD Cat Rank %
Artisan Value Investor 1
Fidelity New Millennium 1
JOHCM International Selec 1
Longleaf Partners 1
Longleaf Partners Interna 1
Manning & Napier Equity S 1
PIMCO Inflation Response 1
Permanent Portfolio Perma 1
Vanguard High-Yield Tax-E 1
Champlain Mid Cap Adv 2
Tech Stocks Power Parnassus
Leaders & Laggards | Andrew Daniels