(PUB) Investing 2015

August 2015

Morningstar FundInvestor

13

Matthews Asia Dividend Is Holding Up Quite Well Leaders & Laggards | Robert Goldsborough

Laggards BBH Core Select BBTEX

Since the start of 2015 , the fund has trailed nearly four out of every five of its large-blend peers. One of its largest holdings, Berkshire Hathaway BRK .A, struggled despite no notable downside catalyst, while fundamentals weighed on other detractors, including Bed Bath & Beyond BBBY and Qualcomm QCOM . IVA Worldwide IVWAX Silver-rated IVA Worldwide has trailed more than 60% of its world-allocation peers since the start of 2015 . Its managers hew to a cautious approach that has served this fund well at times. However, a large cash stake— 36% of the fund—has been a drag on the fund this year, as the fund’s managers think equities are fully valued in most regions and don’t see gold as cheap. Stock selection also has been a culprit, as several U.S. names, including DeVry DV , Berkshire Hathaway, News Corp. NWSA , and Oracle ORCL , and one Japanese holding, Astellas Pharma, have weighed on performance. Top- 10 holding DeVry has been hurt by the slowdown in the for-profit education sector and a Federal Trade Commission investigation. Franklin High-Yield Tax-Free Income FRHIX This Silver-rated high-yield muni fund has posted middling performance over the past several years and has trailed more than 85% of its category peers since the start of the year. An investment in Puerto Rico’s bonds likely hurt the fund. Oppenheimer Gold & Special Minerals OPGSX This fund is down a brutal 26% for the year to date, placing it near the bottom of its peer group. It illus- trates just how rough things have been for those investing in gold or gold miners. This fund’s emphasis on smaller gold producers makes it even more exposed to the price of gold than most of its peers. The smaller firms tend to have extreme rallies when gold surges and extreme declines in a sell-off. K

Leaders Matthews Asia Dividend Investor MAPIX Despite the wild swings in China, Matthews Asia Dividend Investor, with a Morningstar Analyst Rating of Silver, has shone. The recently reopened, diversi- fied Asia-Pacific Japan fund has rewarded investors over the short- and longer-term through an atypical approach that involves significantly differing country and sector weightings from its average peers and the MSCI AC Asia Pacific Index. Thus far this year, the fund has outperformed the category through strong stock selection in Japan (where it has an over- weighting relative to peers), China, and other markets. The fund has topped more than 90% of category peers since the start of 2015 . Hotchkis & Wiley High Yield HWHAX Bronze-rated Hotchkis & Wiley High Yield’s relatively compact portfolio devotes about half of its assets to bonds issued by smaller- and mid-cap firms that are less closely followed. Strong bond-picking and positive credit selection have led the domestic high- yield bond fund ahead of 85% of peers since the start of the year. Its two highest-weighted sectors, energy and basic industry, have posted particularly strong performance. Wasatch Core Growth WGROX Silver-rated Wasatch Core Growth has continued to deliver terrific performance relative to peers, returning about 10% so far this year. The fund has beaten 72% of its peers thus far in 2015 , driven by especially strong stock-picking in the information technology and financials sector. Strong contributors have been major holdings Credit Acceptance CACC and Tyler Technologies TYL . That stock- picking more than offset an overweighting in the hard-hit transportation sector.

Ten Best-Performing Funds

Fund Name YTD Cat Rank % Fairholme Focused Income 1 Fidelity Overseas 1 Morgan Stanley Inst Growt 1 PIMCO Investment Grade Co 1 Scotia Dynamic U.S. Growt 1 Sequoia 1 T. Rowe Price Capital App 1 T. Rowe Price Media & Tel 1 Thornburg Value A 1 ASTON/Montag & Caldwell B 2

Ten Worst-Performing Funds

Fund Name

YTD Cat Rank %

FPA Perennial Delafield Fund

100

99 99 99 99 99

FPA Capital GoodHaven

Janus Contrarian T Longleaf Partners

Loomis Sayles Investment 99 Royce Special Equity Mult 99 AMG Yacktman Focused Serv 98 AMG Yacktman Service 98