(PUB) Investing 2016

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13 Morningstar FundInvestor February 2016
Leaders
Bronze-rated Fidelity Small Cap Stock FSLCX has
posted terrific relative performance, topping 99% of its
small-blend peers over the past year and losing
1 .1% in the 12 months ended January 2016. Lionel
Harris looks for high-quality companies with
dependable business models and seasoned manage-
ment teams. Helping fuel the fund’s strong
returns over the past year have been investments in
Coca-Cola Bottling COKE , IT distributor Ingram
Micro IM, medical-device maker LivaNova LIVN, IT
outsourcing firm Genpact G, and software firms
Global Payments GPN and SolarWinds SWI. Also
benefiting the fund was a position in Synageva
BioPharma, a biotech firm that was acquired shortly
after the fund made an investment.
Over the trailing 12 months, Oppenheimer Global
Opportunities OPGIX has bested fully 95% of the funds
in the world-stock category. Manager Frank
Jennings runs a quirky, small-cap-heavy portfolio that
often produces extreme results. Over the past year,
this fund, which has large weightings in technology
and health care, has enjoyed strong performance
on the backs of investments in Swedish fingerprint-
recognition technology firm Fingerprint Cards—which
has surged from speculative status into a profitable,
growing business—cancer-oriented biotech firm
Genmab GEN, and boron chemical firm Anacor Phar-
maceuticals ANAC, whose 250% return in 2015
was driven by a successful recent product launch and
good results in drug trials for another drug.
Silver-rated Vanguard High-Yield Tax-Exempt
VWAHX has topped 94% of its competitors in the muni-
national intermediate-term Morningstar Category
in the past 12 months. The fund is run conservatively
relative to most funds with a high-yield muni moniker,
but with low fees, the fund can thrive in whichever
of the two categories it’s placed in. Over the past year,
the fund outperformed its high-quality peer group
because of its aggressive credit exposure during a rela-
tively healthy muni credit environment.
Ariel International Equity AINTX has continued to
generate impressive performance, topping 98% of
its foreign large-value peers during trailing one- and
three-year periods. Its recent outperformance in a
down market has followed benchmark-topping gains
during up markets in 2013 and 2014. The fund
has benefited from a number of good value plays
including Deutsche Boerse DB1, Ahold NV, Nintendo,
Ryanair Holdings RYAAY, Reckitt Benckiser, and
Philip Morris PM.
Laggards
RiverPark Wedgewood RWGFX has struggled
recently, lagging fully 94% of its large-growth peers
over the past 12 months. Extreme performance
is not rare for this fund, whose focused portfolio of just
18 stocks isn’t beholden to any index. However, the
fund has been in a prolonged slump—it’s trailed 93%
of peers during the past three years and nearly
two out of three competitors over the past five years.
Major detractors of late include investments in
Qualcomm QCOM, Perrigo PRGO, Mead Johnson
Nutrition MJN, Stericycle SRCL, and energy firms
National Oilwell Varco NOV and Schlumberger SLB.
Weitz Partners Value WPVLX has trailed 96% of
its large-blend peers over the past 12 months. Three
major positions have hurt performance: Avon
Products AVP, Iconix Brand Group ICON, and Range
Resources RRC, all of which fell more than 50%
in 2015. Managers Wally Weitz and Brad Hinton main-
tain both a contrarian focus and a willingness to
bet on firms in turnaround mode such as Avon. And
while that’s common in the value space, investors
should pay close attention the managers’ willingness
to tolerate companies with above-average debt. K
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Ten Worst-Performing Funds
Fund Name YTD Cat Rank %
Dodge & Cox Global Bond 100
T. Rowe Price Media & Tel 100
CGM Focus 99
Dreyfus Opportunistic Sma 99
Fairholme 99
Fairholme Focused Income 99
Fidelity Leveraged Compan 99
Fidelity OTC Portfolio 99
Longleaf Partners Interna 99
Oppenheimer Global Opport 99
Ten Best-Performing Funds
Fund Name YTD Cat Rank %
FAM Value Investor 1
FMI International 1
GoodHaven 1
Jensen Quality Growth J 1
Matthews Asian Growth & I 1
Vanguard Interm-Term Bond 1
Vanguard LifeStrategy Inc 1
Vanguard Total Intl Bd Id 1
AMG Yacktman Service 2
ASTON/River Road Small Ca 2
Quality Limits Damage at Fidelity
Small Cap
Leaders & Laggards | Robert Goldsborough