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A Closed-Fund Watchlist The Contrarian | Russel Kinnel

Aston/Tamro Small Cap ATASX has seen only a modest $240 million go out the door over the past 12 months, but the fund has only $963 million left, so it may be the best bet here to reopen in the near future. Managers Philip Tasho and Tim Holland meld earnings growth and valuations into a tame small- growth portfolio. The long-term record remains strong even though the fund’s 2013 was a dud. Lazard Emerging Markets Equity LZOEX has produced outstanding returns over all the trailing time periods, yet it has seen $900 million in outflows. It still has $16 billion in assets under management, so I count the fund on the less likely to reopen side, but take a close look if it does. James Donald’s mild- mannered but flexible value strategy has been quite consistent. The fund has outperformed peers in eight of the past 10 years. Perkins Small Cap Value JSCVX hasn’t been open for a while, but it’s currently in one of its downward ebbs, so keep your eyes peeled. The Perkins crew runs a focused value style that produces solid long- term results and occasional slumps. The folks who make out like bandits are the ones who buy after the slumps rather than after the rallies. The fund has lost about a third of its assets the past year, and it is now down to $1 . 9 billion in assets. Fidelity Small Cap Value FCPVX is one of my favorite Fidelity funds. Chuck Myers runs a focused Buffett-style small-cap fund that really sets it apart from other Fidelity funds. It behaves differently from most other Fidelity funds, making it a good diver- sifier for those with all-Fidelity portfolios. With $900 million in outflows the past 12 months, this fund might just reopen come 2015 . œ

A fund closing to new investors is rarely a permanent move. Eventually the fund will face enough out- flows to prompt it to reopen. That’s often a wonderful contrarian buying opportunity. Every once in a while a fund will be closed for so long that it needs to reopen because its existing share- holder base is in redemption mode. But more often a fund reopens because redemptions force its hand. And more often than an aging shareholder base, the cause is a slump in performance. So, you’ve got to be a bit of a contrarian to hop on the reopening. I’ve selected six Morningstar Medalists that are good bets to reopen in the next couple of years. So, add the ones you like to your watchlist, and they might become available. AllianzGI NFJ Small-Cap Value PNVDX got a little larger than management wanted, and the firm went so far as to cull a portion of its 401 (k) business. That tells me it may let assets shrink a bit more before reopening. Still, this $7 . 7 billion fund has shed $1 . 3 billion in the past 12 months ended July 2014 , and that’s a fair amount to handle. The fund has a Morn- ingstar Analyst Rating of Silver as it still has the same excellent strategy and management it’s had all along. Yes, the three-year Morningstar Return ranking is weak, but it is top 10% for the trailing 10 years, and its dividend-oriented strategy is a good one. Royce Premier RYPRX is a Gold-rated fund in a slump. Poor five-year returns have led to $1 . 3 billion in outflows at this $6 . 6 billion fund. But we are still confident in Chuck Royce and Whitney George. They look for low debt levels and fundamentals like solid return on invested capital and free cash flow. By Royce standards, the 50 - 70 stock portfolio is concentrated.

Our Contrarian Approach I go against the grain to find overlooked funds that may be ready to rally.