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Four Loser Funds Worth Sticking With for the Turnaround

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You don't make a profit until you sell, as the old saw goes, but the opposite is also true. These four funds, while in the red, are worth holding on to.

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It isn't any fun opening a fresh issue only to see one of your funds with a bunch of red numbers after its name in the data tables.

I took a look through the August issue for funds with red numbers but good reasons to hold on. I can't say all of those with red numbers are keepers. I'm not a big fan of CGM Focus (MUTF:CGMFX) or Brandywine (MUTF:BRWIX). But others offer more hope for a rebound. Here, then, are four of the better ones.

Royce Value (MUTF:RYVFX)
Whitney George and Jay Kaplan have been way off the mark with their sector selection, and the fund has dismal year-to-date and 12-month losses to show for it.

They have big overweightings in energy and basic materials-the year's worst-performing sectors. Moreover, they are underweight in health care, which has been the best place to be.

They aren't attempting to make sector calls, exactly, but George does have a bullish view on materials and energy because of demand from China and other emerging markets. So they have been a consistent feature of the fund since its beginning. I worry less about sector issues at funds that have long-term favorites, provided they've still made money over the long haul.

And this fund has. It is in the top 5% of its peer group, with a robust 13.3% annualized return during the past ten years.

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No positions in stocks mentioned.
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