(PUB) Investing 2016

13

January 2016

Morningstar FundInvestor

T. Rowe Price Blue Chip Growth Enjoyed a Strong 2015 Leaders & Laggards | Robert Goldsborough

Laggards Aston/TAMRO Small Cap ATASX

This fund trailed 98% of its small-growth peers in 2015 , producing a nearly 11% loss in the process. Its biggest losers in 2015 included Iconix Brand Group ICON , United Natural Foods UNFI , Clovis Oncology CLVS , Interactive Intelligence ININ , and Cepheid CPHD , all of which lost more than 30% . Despite the fund’s re- cent weakness, it retains an Analyst Rating of Silver; the fund has posted terrific performance since its inception and has a history of bouncing back from short-term slumps. As such, this fund still looks like a solid small-cap option. Dodge & Cox International Stock DODFX A year after top-decile performance in the foreign large-blend category helped its managers capture the Morningstar International-Stock Fund Manager of the Year award for 2014 , this fund lost more than 11% in 2015 and lagged 98% of its peers. The fund’s meaningful emerging-markets stake relative to its cate- gory contributed to its underperformance in 2015 , as did some particularly weak large holdings, including Petrobras PBR .A (down 55% in 2015 ), Standard Chartered STAN (down 34% ), Hewlett-Packard HPQ (down 31 . 5% ), Royal Dutch Shell RDS .A (down 26% ), and Tyco TYC (down 25 . 5% ). Now closed, the fund has a strong long-term track record, as well as a low expense ratio and relatively light trading costs. It also has higher-than-average volatility. Loomis Sayles Bond Retail LSBRX This fund trailed 93% of its multisector-bond peers in 2015 , shedding 7% . Its underperformance was the result of a meaningful stake in non-U.S.-dollar- denominated debt as the U.S. dollar strengthened, as well as out-of-benchmark allocations in high-yield industrials and convertibles. With a contrarian approach and a bargain-hunting, corporate-heavy strategy, this fund can require patience and can deliver a bumpy ride. However, it has an experienced, well-resourced team and has produced a topnotch long-term record, making it a strong choice in its category. K Contact Robert at robert.goldsborough@morningstar.com

Leaders T. Rowe Price Blue Chip Growth TRBCX This fund has continued to thrive. Longtime manager Larry Puglia led the fund to an 11 . 2% return in 2015 , which bested 97% of its large-growth peers. Among Puglia’s biggest gainers were longtime holding and top position Amazon.com AMZN , Netflix NFLX , Alphabet GOOGL , Starbucks SBUX , and Facebook FB . That was more than enough to offset a top- 20 position in Valeant Pharmaceuticals VRX . PIMCO Income PONAX This fund’s 1 . 8% return in 2015 topped 95% of funds in the multisector-bond Morningstar Category. The fund, which has a Morningstar Analyst Rating of Silver, is capably run by Dan Ivascyn and his coman- ager, Alfred Murata. They have delivered strong longer-term returns and meaningful income without returning capital. In 2015 , a long U.S. dollar bias, particularly relative to the euro and the yen, helped performance, as did emerging-markets debt and securitized credit, particularly in nonagency mortgage- backed securities. American Funds New World NEWFX This conservatively managed fund outperformed 95% of emerging-markets funds, but it still lost nearly 6% . The fund’s managers outperformed peers through strong stock selection in 2015 , including in firms such as China-based online travel firm Ctrip.com CTRP , Danish pharmaceutical firm Novo Nordisk NONOF , Alphabet GOOGL , and South African Internet firm Naspers NPN . In addition to emerging markets, the fund long has invested in developed-country stocks, which helps to damp volatility.

Ten Best-Performing Funds

Fund Name YTD Cat Rank % ASTON/Montag & Caldwell B 1 Brown Capital Mgmt Small 1 Clipper 1 Fidelity Overseas 1 Fidelity Small Cap Stock 1 Oppenheimer Global Opport 1 T. Rowe Price Capital App 1 T. Rowe Price Global Tech 1 T. Rowe Price Media & Tel 1 Vanguard Interm-Term Invm 1

Ten Worst-Performing Funds

Fund Name

YTD Cat Rank %

Longleaf Partners

100

Royce Special Equity Mult 99 ASTON/TAMRO Small Cap N 98 Delafield Fund 98 Dodge & Cox International 98 GoodHaven 98 Loomis Sayles Investment 98 RiverPark/Wedgewood Retai 98 Sequoia 98 FPA Capital 97