(PUB) Investing 2015

August 2015

Morningstar FundInvestor

3

benchmark sector and country weightings. Since taking over in 2007 , Leverenz has more than doubled the returns of benchmark and peers alike. PIMCO Commodity Real Return Strategy PCRIX If inflation ever does come back, you’ll be glad you owned this fund to offset bond losses. Until then, though, you’ll probably regret it. The fund owns expo- sure to a broad array of commodities and throws in some inflation-protected securities to boot, so you have two forms of inflation protection. On the down- side, this fund and nearly all of its competitors are in the red for the past five years as inflation has been tamer than tame. One can gain access to this fund through D shares PCRDX , or there is a near-clone in the form of Harbor Commodity Real Return Strategy HACMX . PIMCO Real Return Instl PRRIX Although PIMCO has had a shakeup, manager Mihir Worah has been at this fund since 2007 , and he’s done a fine job. He looks for the best inflation- protected securities out there among Treasury and non-Treasury issuers. The fund has done quite well over time, too. This fund has D shares PRRDX and also a near-clone in the form of Harbor Real Return HARRX . PIMCO Total Return PTTRX This fund is in good hands despite all the drama around Bill Gross’ exit. It’s run by Scott Mather, Mihir Worah, and Mark Kiesel. All three are proven managers with strong track records. The fund has outperformed benchmark and peers modestly since Gross left. More important, a tidal wave of out- flows hasn’t interfered with the smooth running of the fund, and we expect good things in the future. This fund has D shares PTTDX and a near-clone in the form of Harbor Bond HABDX . Primecap Odyssey Aggressive Growth POAGX This closed fund has been downright remarkable since it was launched in 2004 . Managers Theo Kolo- kotrones and Joel Fried along with the rest of the team have done a brilliant job of finding great biotech and tech names at reasonable prices and holding on until they trade at unreasonable prices. The closest

open substitute would be the large-cap Primecap Odyssey Growth POGRX , which is also great but doesn’t have quite the upside that this does. Royce Special Equity RSEIX Charlie Dreifus is one of the best and most original value investors out there. A disciple of accounting guru Abe Briloff, Dreifus puts a company’s earnings and balance sheet under the microscope to ferret out corner cutting and even outright fraud. It’s a good fund to own when bad news starts spreading on Wall Street. This fund is closed, but Dreifus runs an excellent all-cap fund called Royce Special Equity Multi-Cap Service RSEMX . Selected American SLADX Can Chris Davis right the ship here? That’s the question at the only 2 -star fund in our lineup. In 2014 , Davis changed comanagers when he replaced Ken Feinberg with Danton Goei. The two have trimmed the portfolio a bit while adding health-care and tech stocks. Otherwise, the fund still runs a Warren Buffett-influenced strategy of looking for good companies trading below their estimate of “owner earnings.” The fees and stewardship are strong here. Performance is strong over Davis’ entire tenure, but the fund has been in a prolonged slump. T. Rowe Price High Yield PRHYX Mark Vaselkiv has been at the helm for 19 years, and he’s done a remarkable job. He focuses on issue selection, and in high yield that’s a very hands-on process because you have to dig deep to understand the likelihood that a company will default on its debt. The fund has posted top-quartile returns for the trailing five-, 10 -, and 15 -year periods. Like many of the best high-yield funds, however, it’s closed to new investors. T. Rowe Price Small-Cap Stock OTCFX This $9 billion closed fund is a bit of a dullard, but that’s a good thing in a 401 (k). In his 22 nd year at the fund, Greg McCrickard has a diffuse 300 -stock portfolio with no more than 2% of assets in the top name. The fund has provided a nice smooth ride for investors, and its strong relative performances