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Few investors can go wrong with funds from industry stalwarts such as Dodge & Cox, Vanguard and American Funds, but Morningstar analysts also look to uncover and highlight worthy funds from smaller shops that have gone unnoticed by investors.
And so, as we have done in past years, we've compiled a list of relatively undiscovered funds that deserve more attention from investors. Our list highlights funds with long-tenured managers with proven track records of success -- though not often readily apparent -- that have shown allegiances to their investment styles regardless of market conditions yet still maintained the flexibility of a small asset base (compared with their category peers or on an absolute basis).
WHG LargeCap Value
WHG LargeCap Value's (WHGLX) short track record -- it was launched in mid-2006 -- masks the long-term success of veteran manager Susan Byrne. She is backed by an experienced team of analysts and has employed a consistent, proven strategy for more than 20 years.But don't take our word for it; just look at the numbers. Byrne's new large-value offering isn't really new at all. It's a replica of Gamco Westwood Equity (WESWX), which she has managed since its 1987 inception and where she has posted one of the category's best long-term records.
Her value-orientated contrarian style mixes with her long-term sector-trend analysis and bottom-up fundamental stock research.
Spot-on calls such as rotating out of embattled brokerages Lehman Bros. (LEH, news, msgs), Bear Stearns (BSC, news, msgs) and Morgan Stanley (MS, news, msgs) in early 2007 and into underappreciated software companies have helped WHG LargeCap Value sidestep the market swoon. This fund's 2.6% gain for the year ending May 16 is among the category's top 5%.
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Though the fund boasts just $33 million in assets, Byrne's company, Westwood Holdings Group, launched this offering with just a 1% expense ratio, giving it a healthy leg up on the Gamco offering's 1.47% levy and making it the superior long-term choice. In fact, we think so highly of WHG LargeCap Value's potential that we designated it a Fund Analyst Pick in the large-value category in early 2008.
Marsico Global
This world-stock offering is the baby of our list, as it won't blow out its first birthday candle until July. And though Marsico Global (MGLBX) doesn't offer a comparable history to the Westwood fund, its pedigree is equally impressive.Marsico's newest offering has the greatest flexibility of any of the company's funds, allowing lead manager Cory Gilchrist to load the portfolio with his best large-cap ideas, regardless of their place on the globe. The fund benefits from company founder Tom Marsico's and James Gendelman's ideas as well; they are co-managers.
But make no mistake: This fund is true-blue Marsico, and like the company's other offerings, management maintains a concentrated portfolio that reflects its views about the broad economy as well as industry- and stock-level trends.
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The fund hasn't had a great start to 2008, as a few of its top holdings -- for instance, Google (GOOG, news, msgs) and Las Vegas Sands (LVS, news, msgs) -- have weighed heavily on returns this year. We're not that surprised, though, as the fund's, and the company's, bold style won't hit a home run in every market environment. And over longer periods, the company has shown good success at home and abroad with siblings Focus (MFOCX) and International Opportunities (MIOFX), respectively.
Finally, Marsico Global's low costs -- a 0.75% expense ratio makes it one of the cheapest no-load, world stock offerings available -- furthering its appeal.
Continued: A mover and shaker in the real-estate arena
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