(PUB) Investing 2015

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Eventide Gilead Joins M500 Changes to the 500 | Russel Kinnel

In this fund’s case, the firm brought out managers Christopher Lees and Nudgem Richyal from Baring Asset Management. The pair runs a foreign large- growth strategy that blends macro and micro analysis. The fund’s top-percentile three-year returns have drawn investor notice as assets have grown to $1 . 6 billion and fees are down to 1 . 29% in the No Trans- action Fee share class. More than half of assets are in tech and health care in this aggressive fund. Two Go Out To make room, I am dropping the 1 -star Franklin Balance Sheet Investment FRBSX , which has been dropped from coverage. I’m also dropping the Neutral-rated William Blair International Growth WBIGX . K

I’m adding two funds that are off to strong starts.

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.

Eventide Gilead ETGLX is a unique small/mid- cap growth portfolio with about half of the portfolio concentrated in the health-care and technology sectors. The fund is the brainchild of lead manager Finny Kuruvilla, who has a doctorate and M.D. from Harvard and additional degrees from MIT and Caltech. Comanager David Barksdale has a tech-sector back- ground and handles portfolio construction. The pair’s philosophy is to invest in companies whose products and practices make the world a better place, while avoiding those that do not. The managers believe firms that create positive overall social value for their customers and other stakeholders will produce attractive and sustainable returns for share- holders. Kuruvilla gravitates toward companies whose pipelines and products he knows well and that he believes are poised for wider adoption (or FDA approval in the case of the portfolio’s biotech names). One beneficial side effect has been that the fund often benefits from acquisitions. Although the fund’s overall profile carries risk (smaller cap, aggressive growth, sector concentration) and it wasn’t around for a stress test in 2008 , its five-year downside-capture ratio versus the mid-cap growth Morningstar Cate- gory was only 88 . 1% , and its upside capture ratio was an impressive 112 . 7% . Its three- and five-year trailing returns are in the category’s top percentile. The 5 -star JOHCM International Select II JOHAX has produced brilliant performance since its launch in 2009 . JO Hambro Capital Management Limited is something like Britain’s answer to Artisan Funds. It hires seasoned managers and brings them over to run a strategy for the firm. Sometimes, they lift out the entire team and sometimes just a manager.

Summary of Changes Add

Drop

JOHCM Int’l Select II

Franklin Balance Sheet Invt

Eventide Gilead

William Blair Int’l Growth

Rating Change From American Beacon Sm Cp Val Inv ´ ‰ FPA New Income ´ • ASTON /Montag & Caldwell Gr ´ • T. Rowe Price Short-Term Bond ‰ • Oppenheimer Global Opp A ‰ ´ To