(PUB) Investing 2015

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JPMorgan Income Builder Joins M500 Changes to the 500 | Russel Kinnel

Summary of Changes

Add

Drop

JPMorgan Income Builder

Wasatch Long/Short

Rating Change (upgrades)

To

From

Vanguard Long-Term Invest-Grade • ´ Vanguard High-Yield Corporate Inv • ´

I’m adding JPMorgan Income Builder JNBAX to the Morningstar 500 .

What is Morningstar FundInvestor 500 ? The Morningstar FundInvestor 500 features the industry’s best and most notable funds. Use the list to get new in- vestment ideas and track the funds you already own. FundInvestor subscribers have access to one-page monthly reports on all 500 funds on mfi.morningstar.com. Just type in the name or ticker of the fund in the search box.

Rating Change (downgrades)

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From

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Dreyfus Appreciation Investor

The fund has a Morningstar Analyst Rating of Bronze and aims to meet growing demand for income with a bit of growth to go with it. Investors are certainly interested: The fund has taken in $2 billion in the past 12 months to boost its asset base to $13 billion. The fund has a greater foreign-equity tilt than you typically see in a conservative-allocation fund. At the end of the second quarter, it had 31% of assets in foreign equities to just 16% in U.S. equities and 46% in bonds. Management has tremendous flexibility to move to the most attractive income-producing assets. Besides equities and investment-grade bonds, high-yield debt, preferred stocks, convertible bonds, emerging-markets debt, and nonagency mortgages are fair game. Or, to put it another way, this fund isn’t really all that conservative. Like Franklin Income FKINX , it goes a long way to produce a sizable yield. See the facing page for more. Wasatch Long/Short Goes Out To make room, I’ve given Wasatch Long/Short FMLSX the heave-ho. We have downgraded the fund to Neutral from Bronze. The fund has made some big missteps including an ill-timed bet on energy. The fund’s one-year loss of 12 . 6% is among the worst in the long-short Morningstar Category. In addition, it appears to be moving to ready itself for succession as comanager Ralph Shive moves toward retirement age. K

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Weitz Partners Value Investor

New Ratings

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Harbor Mid Cap Value Investor

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USAA Tax Exempt Interm-Term

Ratings Confirmed in August

Fund Name

Ticker

Rating

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American Funds 2020 Trgt Date Retire

AACTX

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American Funds American Balanced

ABALX

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Calamos Convertible

CCVIX

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Fidelity International Discovery

FIGRX

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Harding Loevner Global Equity Advisor

HLMGX

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Harding Loevner International Eq

HLMNX

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Loomis Sayles Investment Grade Bond

LIGRX

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Oppenheimer Global

OPPAX

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Oppenheimer International Growth

OIGAX

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Sequoia

SEQUX

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Sound Shore Investor

SSHFX

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T. Rowe Price Mid-Cap Growth

RPMGX

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T. Rowe Price Mid-Cap Value

TRMCX

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T. Rowe Price Retirement 2015

TRRGX

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T. Rowe Price Value

TRVLX

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TIAA-CREF Growth & Income Instl

TIGRX

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Vanguard Growth & Income

VQNPX

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Vanguard Growth Index Adm

VIGAX

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Vanguard Interm-Term Invmt-Grade

VFICX

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Vanguard International Value

VTRIX

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Vanguard Long-Term Tax-Exempt

VWLTX

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Vanguard Short-Term Investment-Grade VFSTX

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Vanguard Value Index Adm

VVIAX

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Weitz Hickory

WEHIX