Four Loser Funds Worth Sticking With for the Turnaround
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.
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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