(PUB) Morningstar FundInvestor

December 2013

Morningstar FundInvestor

13

New Economy Rides to the Top Leaders & Laggards | Flynn Murphy

Laggards RiverPark/Wedgewood RWGFX

Despite posting a 26 . 2% gain through November this year, this large-growth fund lags 80% of its peers. That fits this fund’s history of making good, not great, gains in rising markets while suffering less in down markets. The fund’s concentrated portfolio has been hampered by its technology picks, including top- holding Apple AAPL , which is up just 7% this year. Top-five holding EMC Corporation EMC is in neg- ative territory this year as the network-storage firm struggled with disappointing earnings results. T. Rowe Price Mid-Cap Value TRMCX Struggling gold stocks, such as Newmont Mining Corporation NEM , have weighed on this fund in 2013 . The fund’s 27 . 1% return through November lags most mid-value peers and the category average of 31 . 5% . The fund’s managers follow a patient approach, adding to positions if prices drop, which can lead to lumpy returns and periods of short-term pain for shareholders at times. True to form, the managers continued to add to the fund’s stake in gold stocks in mid- 2013 , expecting a more stable supply/demand picture in the future. PIMCO Foreign Bond (Unhedged) PFBDX This world-bond fund tilts heavily toward debt issued in Japan, the United Kingdom, and the eurozone. The fund has been dialing down its exposure to riskier corporate and emerging-markets fare since early 2012 , but its emphasis on longer-dated issues left it exposed during 2013 ’s broad bond market sell-off. The fund’s 5 . 6% loss during the year through November trailed more than 85% of peers’. œ Contact Flynn Murphy at flynn.murphy@morningstar.com

Leaders American Funds New Economy ANEFX

Ten Best-Performing Funds

Fund Name

YTD Cat Rank %

This large-growth fund has continued to succeed in spite of recent headwinds posed by its outsized stake in international stocks. The fund, which seeks firms that either create or benefit from innovation, holds more than one third of its assets in foreign fare, includ- ing a 7% stake in Chinese stocks. Despite interna- tional and emerging markets lagging domestic stocks in 2013 , this fund’s 39 . 3% gain for the year through November tops nearly all category peers. Strong stock selection powered that gain: Top-three holding Net- flix NFLX gained more than 295% so far in 2013 while Galaxy Entertainment Group GXYEY (a casino and resort operator in Macau) is up more than 90% . Ariel ARGFX A big slug of consumer cyclical stocks has boosted this fund’s performance so far in 2013 . Manager John Rogers and team look to buy troubled firms at steep discounts, which has led to elevated volatility and long periods of underperformance in the past. But the fund’s 39 . 4% gain this year reaches the mid-blend category’s top decile. Cyclical holdings such as media conglomerate Gannett Company GCI and advertis- ing firm Interpublic Group IPG have fueled returns, posting 54% and 61% gains, respectively, this year through November. Dodge & Cox Income DODIX This intermediate-term bond fund has managed to eke out a 0 . 7% gain during a year when its typical peer has lost money. By holding roughly half its portfolio in corporate bonds, and taking a defensive stance against rising interest rates, the fund stood out from Treasury-heavy peers and benchmark Barclays US Aggregate Bond Index—and held up better than both in this year’s rising-rate environment.

American Funds 2020 Trgt Artisan International Val

1 1 1

Berwyn Income

Dodge & Cox Balanced 1 Fairholme Focused Income 1 Oakmark International I 1 T. Rowe Price Media & Tel 1 Third Avenue Real Estate 1 Vanguard Capital Value In 1 Vanguard Precious Metals 1

Ten Worst-Performing Funds

Fund Name YTD Cat Rank % Royce Low Priced Stock Sv 99 Amana Growth Investor 98 Appleseed 98 FPA Capital 98 First Eagle US Value A 98 Virtus Foreign Opportunit 98 American Century Equity I 97 Dreyfus Appreciation Inve 97 Lateef A 97 Permanent Portfolio 97