(PUB) Morningstar FundInvestor

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Baron Opportunity Joins the Morningstar 500 Changes to the 500 | Russel Kinnel

Akre looks for firms with sustainable competitive advantages. He first bought shares of top- 20 holding Live Nation Entertainment LYV , for example, between February and October because he likes its sophisticated use of technology for concert pro- motion. The firm’s shares gained 112% in 2013 and contributed significantly to the fund’s returns. Correction The one-page fund reports in the January 2014 issue of FundInvestor had an error in the calendar-year returns. Returns were off by one year so that 2008 returns were displayed in 2009 and 2009 in 2010 . You can find the correct versions of these reports on mfi.morningstar.com . We regret the error. œ

We are dropping the bearish Hussman Strategic Total Return HSTRX and replacing it with Baron Opportunity BIOPX . Hussman has its merits, but its big bet on gold miners’ stocks undermined its goal of preserving capital. The fund lost 8 . 4% in 2013 and gained only 1 . 1% in 2012 . That was pretty disappointing, and it has spurred large-scale redemptions from the Neutral-rated fund. In its place goes Baron Opportunity. This Bronze-rated fund has performed admirably under manager Michael Lippert. Lippert, who came on board in 2006 , em- phasizes faster growth than his peers at Baron, where steady growth is the common mantra. He looks for companies with sustainable competitive advantages and tends to emphasize tech, media, and telecom more than his fellow managers at Baron. The mid-growth fund has an appealingly small $ 495 million under management, though its expense ratio of 1 . 37% is nothing to write home about. Akre Focus Raised to Silver We raised our rating on Akre Focus AKREX to Silver from Bronze as the team behind the fund continues to jell. Chuck Akre had to build a new analyst team when he parted ways with FBR in 2009 . Now much of that team has four years together, and it seems to be running smoothly. That’s bearing results in a consis- tent approach and solid performance. See the facing page for more.

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.

Summary of Changes

Add

Drop

Baron Opportunity

Hussman Strategic Total Return

Rating Change

To

From

Akre Focus

• ´

PIMCO Global Multi-Asset

‰ ˆ

T. Rowe Price Growth Stock

´ ‰

Western Asset Core Bond

• ˆ

Western Asset Core Plus Bond

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We also give manager Akre credit for his excellent run at previous charge FBR Focus.