(PUB) Morningstar FundInvestor

Know Your Fund Company’s Achilles’ Heel Continued From Cover

2

we rate seven bond funds from American, and they all earn Morningstar Analyst Ratings of Neutral. For small caps, American has just one very diffuse world-stock fund that doesn’t really have that much appeal. On the bond side, you’ve got lots of options to diver- sify your portfolio, but here are three worth a look for no-load and load. On the load side, there’s Frank- lin Federal Intermediate-Term Tax-Free Income FKITX . Franklin is one of the better muni managers on the load side. It has modest costs and robust resources for doing research. On the taxable side, let’s stay with the Franklin Temp- leton family and buy the bold border-crossing Temp- leton Global Bond TPINX run by Michael Hasenstab.

The strategy is to combine currency and yield plays in order to deliver strong long-term returns. It’s got a fair amount of risk, though, so this will work only as a long-term holding. Now, let’s dial down the risk by purchasing PIMCO Real Return PRTNX for some well- run TIPS exposure. On the no-load side, we can switch to Harbor Real Return HARRX for the same PIMCO strategy and manager. For munis you can use the same ones I men- tioned for PIMCO , but consider Fidelity Intermediate Municipal Income FLTMX if you want a little less interest-rate risk. Finally, we’ll round things out with T. Rowe Price New Income PRCIX . This interme- diate-term bond fund is a typical T. Rowe fund when it comes to caution and diversification. The fund tends to outperform in difficult markets and have more- middling returns when risk is rewarded.

Funds for Rounding Out a Family-Centric Portfolio

Total Ret % Rank Cat 10 Yr (Daily)

Total Ret % Rank Cat 15 Yr (Daily)

Prospectus Net Expense Ratio %

Morningstar Analyst Rating Morningstar Category

Max Front Load %

Top Manager Ownership Level

Name

Ticker

Akre Focus

AKREX

Mid-Cap Growth

— — 1.40

— More than $1M

´

Artisan Global Value

ARTGX

World Stock

— — 1.52

— More than $1M

•

Causeway International Value

CIVVX

Foreign Large Blend

22

— 1.24

— More than $1M

Œ

Dodge & Cox Global Stock

DODWX

World Stock

— — 0.65

— More than $1M

Œ

Dodge & Cox Income

DODIX

Intermediate-Term Bond

25

16

0.43

— More than $1M

Œ

Fidelity Intermediate Municipal Income FLTMX

Muni National Interm

29

22

0.37

— $100,001–$500,000

Œ

Fidelity Tax-Free Bond

FTABX

Muni National Long

6

— 0.25

— $100,001–$500,000

Œ

FMI Focus

FMIOX

Small Blend

22

1

1.26

— More than $1M

•

FPA Crescent

FPACX

Moderate Allocation

2

2

1.26

— More than $1M

Œ

Franklin Federal Tax-Free Income

FKTIX

— Muni National Long

12

20

0.61

4.25

0

Harbor Real Return

HARRX

Inflation-Protected Bond

— — 0.59

— 0

Œ

Longleaf Partners

LLPFX

Large Blend

77

11

0.91

— More than $1M

•

Oakmark Select

OAKLX

Large Blend

28

2

1.05

— More than $1M

Œ

PIMCO All Asset

PASDX

World Allocation

55

— 1.29

— 0

Œ

PIMCO Investment Grade Corp Bd

PIGIX

Intermediate-Term Bond

1

— 0.50

— $1–$10,000

•

PIMCO Real Return

PRTNX

Inflation-Protected Bond

13

20

0.85

3.75

$50,001–$100,000

Œ

PIMCO Unconstrained Bond

PUBDX

Nontraditional Bond

— — 1.30

— More than $1M

´

Sequoia

SEQUX

Large Growth

19

11

1.03

— More than $1M

Œ

T. Rowe Price New Income

PRCIX

Intermediate-Term Bond

33

35

0.61

— $100,001–$500,000

•

Templeton Global Bond

TPINX

World Bond

1

4

0.90

4.25

More than $1M

Œ

Vanguard Interm-Term Tx-Ex

VWITX

Muni National Interm

25

26

0.20

— N/A

•

Vanguard Tax-Managed Intl

VTMGX

Foreign Large Blend

34

— 0.10

— 0

Œ

Vanguard Total Stock Mkt Idx

VTSAX

Large Blend

18

— 0.05

— $500,001–$1,000,000

Œ

Data as of Sept. 24, 2013.