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A Trio of Top Fund Managers

04/03/2014 9:00 am EST

Focus: FUNDS

Jim Lowell

Senior Partner & Chief Investment Strategist, Adviser Investments

In his assessment of Fidelity funds, Jim Lowell focuses first and foremost on the quality and long-term performance of each fund's manager. In his Fidelity Investor, he highlights three favorite funds with top managers.

Capital & Income (US:FAGIX)

Manager Mark Notkin invests in both high quality and leveraged company stocks and high yield bonds that range from higher quality, more liquid names, to lower quality debt.

There’s no question that a lot of good news is priced into the current junk bond universe, but with Mark’s active management strengths, and his team’s research capabilities, I have no doubt he’s finding value.

In terms of the fund’s role, it’s a chicken-hearted way to hedge the stock market while delving for enhanced yield relative to the bond market. But, given my view of sustained growth, perhaps even faster-paced growth, I expect the economic sensitivity of what Mark holds to continue to reward us.

The current investment mix is equities (19.2%), bonds (76.3%), and cash (4.5%). It began trading in November 1977 and has a market value of close to $10 billion. Foreign investments make up 13.8% of the holdings.

Contrafund (US:FCNTX)

Will Danoff remains nothing short of remarkable. His contrarian style and stellar track record speak to the strengths of a stock picker that knows how to reward shareholders year-in and year-out.

Will makes investments across the board in companies believed to be undervalued by the public, overlooked by institutions, and/or underweighted by both. It began trading in May 1967 and has a market value of close to $75 billion. Foreign investments make up 9.4% of the holdings.

The top three sectors are information technology (27.1%), consumer discretionary (20.2%), and financials (16.8%). Top holdings include Google, Berkshire Hathaway, and Disney.

Low-Priced Stock (US:FLPSX)

Joel remains inimitable, and for long-term investors like us, unbeatable. Lead manager Joel Tillinghast invests in low-priced stocks of $35 or less. His fund began trading in December 1989 (I say “his fund,” because it was his idea and he launched it) and has a market value of $30 billion.

Joel has always lived locally and invested globally, the first and best global investor in the small-/mid-cap camp with a track record long enough to show trials that reflect fewer tribulations and more triumph.

Foreign investments make up 32.4% of the holdings. The top three sectors are consumer discretionary (25.1%), information technology (18.8%), and financials (11%). Joel’s top picks include UnitedHealth Group, Seagate Technology, and Bed Bath & Beyond.

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