(PUB) Morningstar FundInvestor

August 2 014

Morningstar FundInvestor

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Matthews India Leads Category Again Leaders & Laggards | William Rocco

same sound strategy it uses here, and while one member of the team will retire in late 2016 , the other three members inspire confidence.

Laggards Thornburg International Value TGVAX

This foreign large-growth fund is trailing well behind its typical peer this year. It has also lagged its average rival in 2013 , 2012 , and 2011 . That’s disappointing, and Bill Fries and Lie Wang’s stock selection and will- ingness to load up on individual sectors and coun- tries are partly to blame for this slump. But the fund has also faced stylistic headwinds in recent years as it has evolved from an all-cap offering to a giant-cap vehicle because of its growing asset base, and giant caps have lagged smaller caps in the past few years. Oppenheimer Global Opportunities OPGIX This world-stock fund has really struggled this year, held back by its growth bias, its relatively hefty stake in the anemic consumer cyclical sector, and some individual picks in other sectors, including the biopharmaceutical company Nektar Therapeu- tics NKTR (which is a 7% position). But manager Frank Jennings has always pursued companies with strong three- to five-year growth prospects, and he has regularly built oversized stakes in individual sectors and names that meet his growth and other standards. While his fairly bold style has backfired during the first seven months of 2014 , it has paid off nicely over the long run. emphasis on Midwest-based firms and low turnover, is mired in its category’s worst decile this year. It has been hampered by some industrial holdings, including Minnesota-based Toro TTC (which has been a holding since 1993 ) and Missouri-based Emerson Electric EMR (a holding since 1998 ). But management’s focus on strong growers located near Mairs & Power’s home in Minnesota has worked well for decades, and the fund boasts great long- term returns. Although one of its two managers will retire soon, the other is long-tenured and has a strong support team. œ Mairs & Power Growth MPGFX This large-blend fund, which stands out for its

Leaders Matthews India MINDX This fund has posted huge returns and handily out- gained all the other offerings in the small-cap India-equity Morningstar Category; stocks in its target market have rebounded sharply in 2014 because of positive political and other developments. The fund has benefited from Sunil Asnani and Shratt Shroff’s picks, including the industrial parts maker AIA Engi- neering, Kotak Mahindra Bank, and Internet content provider Info Edge. This year is no fluke: The man- agers’ emphasis on strong and sustainable growers has paid off in a mix of markets in the past, and this fund boasts superior long-term returns as well. Manning & Napier Equity EXEYX This large-growth fund has been rewarded for its distinctions this year. Its management team readily builds sizable sector overweightings and makes fuller use of the market-cap and style spectrums than most peers. Thanks to its hefty stake in the strong energy sector and many of its large- and mid-cap value and blend holdings, as well as several of its large-growth stocks, it has outpaced the vast majority of its category rivals in 2014 . Although the team’s penchant for sector bets and overall flexibility has backfired at times, the fund boasts strong long- term returns. Artisan Value ARTLX After disappointing in the rallies of 2012 and 2013 , this large-value fund has fared very well in this year’s favorable conditions. This year’s gains have been fueled by its four-person management team’s tech and energy picks, including top-five holdings Apple AAPL and Baker Hughes BHI . The fund, which opened in 2006 , also posted mixed results in its early years but has outpaced its average peer since inception. The team has earned good long-term results at mid- and small-value funds using the

Ten Best-Performing Funds

Fund Name

YTD Cat Rank %

ClearBridge Aggressive Gr 1 Fairholme Focused Income 1 Fidelity Select Health Ca 1 Matthews India Investor 1 Meridian Small Cap Growth 1 Oakmark Select I 1 Vanguard PRIMECAP Inv 1 Domini Social Equity Inv 2 Fidelity New Markets Inco 2 Janus Contrarian T 2

Ten Worst-Performing Funds

Fund Name CGM Focus CGM Realty

YTD Cat Rank %

100

100 Vanguard Precious Metals 100 Ariel Discovery Investor 99 Greenspring 99 Oppenheimer Global Opport 99 Berwyn 98 Conestoga Small Cap Inves 98 Mairs & Power Growth Inv 98 Baron Opportunity Retail 97