(PUB) Morningstar FundInvestor

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T. Rowe Price Overseas Joins the 500 Changes to the 500 | Russel Kinnel

Three Go Out Leuthold Asset Allocation LAALX is being merged into Leuthold Core Investment LCORX , so it leaves the 500 . We rate Leuthold Core Investment Bronze. With a new manager and strategy, FPA Paramount FPRAX also departs. See Manager Changes on Page 14 for more details. Finally, the disappointing and shrinking Muhlen- kamp Fund MUHLX has been dropped from coverage and is leaving the Morningstar 500 . Keep an Eye on Taxes Five years into the stock market rally, it’s likely that more funds will distribute capital gains in December. Typically, fund companies post their first estimates of expected capital gains in early November. If you are buying in a taxable account, be sure to check the fund company website or call to see if it has an estimate of capital gains. œ

I am adding three very different funds to the 500 .

What is Morningstar FundInvestor 500 ? The Morningstar FundInvestor 500 features the industry’s best and most notable funds. Use the list to get new investment 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.

First, there is Gold-rated FMI Common Stock FMIMX , which is closed to new investors. I hesitate to add a fund that’s already closed, but I received a number of requests from subscribers to add the fund. It’s an excellent mid-blend fund run by Pat English and Andy Ramer. It closed at the end of 2009 when assets were $ 890 million; assets are now $ 1 . 3 billion. English has been with the fund since its 1997 inception. Bronze-rated T. Rowe Price Overseas Stock TROSX has risen, in our view, as Ray Mills builds a track record. He has been on the fund since its 2006 incep- tion, and it has proved to be a consistent performer. It has outperformed its peers by a modest amount in each of the past five years. Mills employs a patient value-leaning strategy. His diversified portfolios and more-moderate performance signal that the fund is best owned by those who value consistency over the return potential of a more focused fund. The fund has $ 6 . 3 billion in assets and a low 14% turnover rate. Its top country weightings are the United Kingdom 23% and Japan 20% . Finally, I’m adding Silver-rated American Funds Target Date Retirement 2020 AACTX . The fund captures all of American Funds’ strengths and weak- nesses. You get strong stock selection and low costs, which make for a good retirement-fund package. However, American’s bond funds are mediocre, so that keeps their target-date funds a notch below those offered by T. Rowe Price and Vanguard. See the facing page for more details.

Summary of Changes

Add Drop American Funds Trgt Date Ret 2020 Muhlenkamp T. Rowe Price Overseas Stock FPA Paramount FMI Common Stock

Leuthold Asset Allocation

Rating Change

To

From

Calamos Convertible

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Columbia Acorn USA

Not Rated

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Third Avenue Small Cap Value Inst'l

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