Desktop Stock Ticker | 22 ‘Go Anywhere’ Funds That Are Thriving

22 ‘Go Anywhere’ Funds That Are Thriving

When the stock ticker market takes a prolonged dive, there’s an argument to be made that fund managers with the flexibility to invest across the market capitalization spectrum have an added edge over competitors that are confined to a certain niche. The rationale? That these managers can easily go out of distress spots and into areas with more growth potential, while the others can’t help but get caught in the turmoil.

That’s a key selling point for so-called “go somewhere” funds or what Lipper tags as multicaps. These funds can invest in every corner of the stock ticker market — and that agility seems to be paying off. According to Lipper, the average multicap fund is up 7.1% this year through Thursday. That’s nearly five percentage points better than the typical S&P 500 index fund and second only to midcaps when it comes to mainstream fund category performance.

This week the SmartMoney fund screen focuses on this sector, which includes 1,608 funds and share classes. We narrowed that group to 296 offerings by disqualifying load funds. In addition, we looked for funds that charged below-average fees and have top-tier three- and five-year performance track records. Their 2009 return also had to exceed that of the S&P 500. That left us with the 22 funds on the table below.

We have been keeping a close eye on this category all year for signs that it may be breaking away from the pack. When we last looked at multicaps in early March, the category as a whole was down an average 21.2%. The stock ticker market bottomed out a few days later and has since gone on a remarkable run, gaining by more than a third. Midcaps — a category we advised you to watch two weeks ago — has been the largest beneficiary of that rally. The average fund in that niche is up 9.2% this year. “We remain buyers of…midcaps,” said Citigroup’s small-cap and midcap equity strategist Lori Calvasina in a recent report. “We would use any near-term weakness as an opportunity to add to positions.” Many of the managers of the top-performing funds in the table below have taken a similar position and have large exposure to that area in their portfolios.

Of course, there are some issues that rise when investing in multicap funds. Some advisors shy away from the category because they make asset allocation hard. After all, an advisor can’t accurately judge a client’s exposure to, say, small caps, without knowing what the multicap fund owns (and that’s only told a few era a year). Though, this can really work in investors’ favor, too. Many market watchers reckon stock tickers will soon encounter a pullback before certainly rebounding. Health care, technology, growth and small-cap stock tickers are all believed to be sectors that could outperform in that scenario. Instead of making a bet on each of those areas, investors can austerely buy a multicap fund that has exposure to them all.

One fascinating trend that emerged when we did our screen is that most of the funds in our table are managed by independent firms and several are family-run offerings. In honor of Father’s Day, we recently spoke with several father-and-son investing teams including the men behind the Croft Value fund (CLVFX), which is run by Gordon Croft and his two sons, Kent and Russell. One secret they slipped us: Don’t go with the pack. Says Russell Croft: “The search for inherent, hidden value with a contrarian nature — we got that from our father more than anything.” The fund has returned an average annual 2.4% over the last decade, excellent enough for a top 10% spot in Morningstar’s large blend category. Key holdings as of the fund’s latest filing date include Weyerhaeuser (WY), Johnson & Johnson (JNJ), Deere (DE) and Cisco (CSCO). Year to date the fund is up 11%.

We would also suggest looking at Amana Growth (AMAGX), Auxier Focus (AUXFX), Becker Value Equity (BVEFX), Westport (WPFRX) and the Yacktman funds. The funds have seasoned managers, excellent track records and low fees — all the beginning hallmarks we look for in a mutual fund.

The Criteria: The multicap equity funds on our list are open to new money, require a minimum investment under $5,000 and charge an annual expense ratio less than 1.5%. The funds have three- and five-year track records that place them in the top 25% of their category. In addition, they’re beating the 2009 return of the typical S&P 500 index fund. Irrevocably, we did not include funds that charge a sales load.

Go Somewhere, Buy Anything
Ticker Name Assets (In Millions) Year-to-Date Return (%) 3-Year Average Annual Return (%) 5-Year Average Annual Return (%) Expense Ratio (%)
Source: Lipper
Note: Data as of June 18, 2009
AMAGX Amana Growth 1046.7 8.32 -0.75 7.21 1.31
AUXFX Auxier Focus 84.3 5.49 -1.92 1.32 1.35
BIOPX Baron iOpportunity 125.0 24.58 -2.22 2.45 1.42
BVEFX Becker Value Equity 68.2 3.56 -5.66 0.15 0.99
CSVFX Columbia Strategic Shareholder 521.8 8.59 -6.18 -0.12 1.01
CLVFX Croft Value 79.9 11.00 -5.48 1.76 1.48
FOCPX Fidelity OTC 4079.0 26.05 -0.17 2.13 1.06
GABAX Gabelli Asset 1769.8 4.87 -5.09 0.94 1.38
HRSVX Heartland:Select Value 276.0 6.53 -5.35 2.76 1.33
JSVAX Janus Contrarian 3519.9 9.45 -5.68 3.40 1.01
JORNX Janus Orion 2752.6 18.08 -3.10 4.44 0.93
EXEYX Manning & Napier Equity 738.2 13.64 -5.45 2.05 1.05
OSTFX Osterweis 522.4 10.31 -2.73 2.13 1.20
PARNX Parnassus 251.7 15.52 -3.14 -0.30 0.99
TOCQX Tocqueville 339.1 5.49 -6.49 0.65 1.25
TPVIX Transamerica Head of state Diversified Equity 219.5 9.78 -5.74 0.44 1.15
TPAGX Transamerica Head of state Focus 58.2 16.04 -2.99 2.44 1.37
SGROX Wells Fargo Advantage Growth 681.8 13.52 -2.66 1.89 1.44
WPFRX Westport 132.4 9.34 -1.23 4.43 1.37
WBGSX William Blair Growth 95.3 17.28 -2.35 2.02 1.17
YAFFX Yacktman Focused 154.3 29.09 4.94 5.03 1.25
YACKX Yacktman 467.1 24.48 2.48 3.44 0.95
Recipe
  • Fund Type = Multicap
  • Annualized 3-Year Return (%) = Show Only
  • Rank in Classification (%) (3 year performance) <= 25
  • Annualized 5-Year Return (%) = Show Only
  • Rank in Classification (%) (5 year performance) <= 25
  • Expense Ratio <= 1.5%
  • Load Fund (type) = No Load
  • Minimum Initial Investment <= $5,000
  • Open to New Investors = Yes
  • Total Net Assets ($ millions) >= 50
  • Year to Date Return (%) >= 2.8

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