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Mutual funds we're buying By Kunal Kapoor
http://www.JewishWorldReview.com |
(KRT)
If you're a longtime follower of Morningstar research, you're
probably familiar with some of our favorite mutual funds. Not only
do we occasionally publish the list of fund choices in Morningstar's
own 401(k) plan, but our Fund Analyst Picks list represents the most
comprehensive collection of our best ideas.
Still, Morningstar fund analysts do tend to have very strong
individual opinions, and from time to time it's interesting to take
a peek at what they're buying and selling. As such, I recently
polled our fund analyst staff to see what moves they've been making
lately in their own portfolios.
First, it's worth pointing out that given the buy-and-hold mentality
that permeates our investing approach, most analysts were making
moves on the margins only. In most cases, new purchases were made to
augment a portfolio. And they generally were consistent with what
we've been telling you lately. Indeed, analysts were generally
increasing exposure to large-cap funds — with an emphasis on growth
in particular, cutting back on small-cap and real estate funds, and
continuing to maintain or increase exposure to overseas funds. And
there was even some interest in convertible funds.
Of course, there are always exceptions, and you can count analyst
Dieter Bardy among those who think that the small-cap rally isn't
over. Unlike many others on Morningstar's fund analyst staff, Bardy
has let his investment in American Beacon Small Cap Value (AVFIX)
continue to run because he isn't yet compelled by arguments that
small caps are poised to slow. That said, Bardy — who is one of our
real estate experts — has cut his exposure to that segment of the
market, a move that's consistent with those made by other analysts.
Meanwhile, analyst Greg Carlson isn't letting his small-cap exposure
run, but he has made some changes to its composition. Carlson has
begun to trim his stake in Fidelity Low-Priced Stock (FLPSX),
figuring that he wants more dedicated small-cap exposure. As such,
he has initiated positions in Masters' Select Smaller Companies
(MSSFX) and Bridgeway Ultra-Small Company Market (BRSIX). Carlson is
also further boosting his international exposure and plans to add
Harbor International Growth (HAIGX) to his portfolio.
Analyst Todd Trubey also picked up Masters' Select Small at the
expense of T. Rowe Price Small-Cap Stock (OTCFX). Trubey thinks the
fund's smaller size will work in its favor. He has also sold Harbor
Capital Appreciation (HACAX) and replaced it with Marsico Focus
(MFOCX), which he likes as a counterbalance to his focused large-cap
value exposure. That said, several other analysts continue to favor
the Harbor fund as a way to get exposure to large-cap growth stocks.
Getting a little more unorthodox are analysts Gareth Lyons and Andy
Gogerty. Lyons recently purchased Northern Income Equity (NOIEX) for
his daughter Sadie, betting that convertibles were due to bounce
back. (Incidentally, at 55 percent of assets, Lyons' total nondollar
exposure is among the highest in the group.) Gogerty went a
different direction, putting money in T. Rowe Price Emerging Markets
Bond (PREMX). He sees the fund as a way to diversify a portfolio
that is heavily tilted towards domestic stocks, and to gain exposure
to emerging markets without all the risks that accompany an
investment in emerging-markets stocks.
Finally, I recently invested in T. Rowe Price Global Stock (PRGSX).
My portfolio is slanted toward the value end of the spectrum, so
I've recently been on the hunt for a growth offering. However, I
wanted to be sure to avoid a manager who chases growth with no
regard for valuations. So, I got very interested in this formerly
middling fund when manager Robert Gensler took over a few months
ago. I like the idea of investing with a talented manager who has a
small asset base to start with, and the support of an organization
that is serious about improving its international research.
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Arnold Ahlert | |||||||||||
