Kiplinger\'s Personal Finance - 10.2019

38 KIPLINGER’S PERSONAL FINANCE^ 10/2019

INVESTING

THE KIPLINGER 25 UPDATE

An Eye for High-

Quality Bargains

own something unless I’m

going to own it through a

recession.”

One boost to the fund’s

recent performance came

from savvy purchases of

beaten-down stocks in late

2018. Air Products & Chem-
      icals (a member of the Kip-
      linger 15 list of our favorite
      dividend stocks), Ball Corp.
      and Public Storage were all
      late-2018 purchases. Each
      of those stocks has posted
      double-digit gains of more
      than 29% since the start
      of 2019. By contrast, the
      S&P 500 has gained 17.8%.
      This past summer, as
      stocks fell over trade wor-
      ries (again), Finn found a
      few more bargains. “En-
      ergy stocks have been oblit-
      erated,” he says. He picked
      up shares in giant energy
      firm Chevron and added
      to stakes in ConocoPhil-
      lips and exploration-and-
      production company
      Concho Resources.
      Finn’s somewhat con-
      trarian calls have worked
      against him at times. The
      fund had lackluster years
      in 2016 and 2018. But since
      he took over in late 2009,
      the fund has returned an
      annualized 11.8%, which
      beats its benchmark, the
      Russell 1000 Value index,
      by an average of 0.7 per-
      centage point per year.
      NELLIE S. HUANG
      [email protected]

VA L U E - O R I E N T E D F U N Ds

have had a rough go of it.

For the greater part of the

past decade, bargain-priced

stocks have lagged the

broad market. That’s what

makes the recent perfor-

mance of T. ROWE PRICE VALUE

remarkable. Over the past

12 months to August 9,

Price Value has outpaced

Standard & Poor’s 500-

stock index and 90% of its

peers—funds that focus on

large-company stocks trad-

ing at a discount—with a

6.0% return. “Everything

is going extremely well,”

says manager Mark Finn.

“I feel like this is my time.”

After the correction in

late 2018, Finn began to

shore up his portfolio,

focusing on sectors he

thought were “going to

be truly safe” and sticking

with high-quality firms,

he says. He favors large,

attractively priced com-

panies with strong balance

sheets, smart executives

and solid strategies for im-

proving their businesses.

He shed some shares in

telecom firms in part be-

cause of concerns about a

shifting competitive land-

scape. And he beefed up his

holdings in health care, real

estate investment trusts and

utilities. “I’m being picky

and careful about what I

buy,” he says. “My acid test

is I don’t want to buy or

KEY DATA FOR OUR MUTUAL FUND PICKS

U.S. Stock Funds Symbol

Annualized

total return Added to

1 yr. 5 yrs. 10 yrs. Yield Kip 25

D.F. Dent Midcap Growth DFDMX 16.3% 14.6% — 0.0% May 2019

Dodge & Cox Stock DODGX –2.9 8.2 12.5% 1.7 May 2014

Mairs & Power Growth MPGFX 5.7 9.1 12.8 1.3 Jan. 2013

Parnassus Mid Cap PARMX 10.5 10.5 13.6 0.6 Aug. 2014

T. Rowe Price Blue Chip GrowthTRBCX 5.5 14.8 16.5 0.0 May 2016

T. Rowe Price Dividend Growth PRDGX 12.5 12.1 13.4 0.0 Oct. 2016

T. Rowe Price QM US Sm-Cp GroPRDSX 2.0 11.3 15.9 0.0 May 2015

T. Rowe Price Sm-Cap Value PRSVX –6.0 7.9 11.7 0.0 May 2009

T. Rowe Price Value TRVLX 6.0 8.1 12.4 0.0 May 2015

Primecap Odyssey Growth POGRX –7.8 11.6 14.0 0.3 May 2017

Vanguard Equity-Income VEIPX 3.3 9.2 12.8 2.9 Jan. 2017

Wasatch Small Cap Value WMCVX –2 .6 8 .7 1 2 .9 0.0 N ov. 2 01 8

Annualized

International total return

Stock Funds Symbol

Added to

1 yr. 5 yrs. 10 yrs. Yield Kip 25

AMG TimesSquare Intl Sm-CapTCMPX –12.1% 5.6% — 0.7% May 2018

Baron Emerging Markets BEXFX –3.5 1.9 — 0.1 Oct. 2016

Fidelity International Growth FIGFX 4.0 6.2 9.0% 0.7 Feb. 2016

Oakmark International OAKIX –13.2 1.5 7.0 1.9 July 2017

Annualized

Specialized/ total return

Go-Anywhere Funds Symbol

Added to

1 yr. 5 yrs. 10 yrs. Yield Kip 25

Vanguard Health Care VGHCX –0.1% 8.6% 14.2% 1.3% May 2016

Vanguard Wellington‡ VWELX 6.7 7.8 10.0 2.5 May 2016

Annualized

total return

Bond Funds Symbol

Added to

1 yr. 5 yrs. 10 yrs. Yield Kip 25

DoubleLine Total Return N DLTNX 7.0% 3.2% — 3.4% May 2011

Fidelity Intermed Muni FLTMX 7.7 3.2 3.7% 1.6 May 2004

Fidelity New Markets Income FNMIX 7.3 4.3 7.0 5.1 May 2012

Fidelity Strategic Income FADMX 6.3 3.9 5.8 3.4 May 2018

Met West Total Return Bond M MWTRX 9.3 2.9 5.4 2.5 May 2016

Vanguard High-Yield Corporate VWEHX 7.2 5.0 7.6 5.0 May 2016

Vanguard Sh-Tm Inv-Grade VFSTX 5.7 2.3 3.0 2.3 May 2010

Annualized

total return

Indexes 1 yr. 5 yrs. 10 yrs. Yield

S&P 500-STOCK INDEX 4.4% 10.9% 13.5% 2.0%

RUSSELL 2000 INDEX* –9.2 7.5 11.7 1.5

MSCI EAFE INDEX† –4.6 2.5 5.4 3.4

MSCI EMERGING MARKETS INDEX –6.7 1.1 3.9 2.9

BLOOMBERG BARCLAYS AGG BND IDX# 9.3 3.2 4.0 2.3

Kiplinger 25 funds are no-load; you can buy them without sales

charges. For more about the funds, visit kiplinger.com/links/kip25.

As of August 9. ‡Open to new investors if purchased directly through the fund company. *Small-

company U.S. stocks. †Foreign stocks. #High-grade U.S. bonds. —Fund not in existence for the entire

period. SOURCES: Fund companies, FTSE Russell, Morningstar Inc., MSCI, S&P Dow Jones Indices.