A Fund to Please Everyone
10/27/2006 12:00 am EST
Whether you are bullish, bearish, value-, growth- or income- oriented, veteran fund pro Jim Lowell can find you a fund that matches your requirements. Here he provides his subscribers with three choices, apt to suit investors in any corner.
"Buy Contrafund (FCNTX ). Google a contrarian and you ought to find manager Will Danoff as the top link (coincidentally, Google is his top holding). Danoff is struggling a bit this year (he's lagging his benchmark S&P 500index by 0.3%, and that lag is part of the current drag on our portfolios' performance), but the year ain't over yet, and besides, it's his longer-term track record of being able to outperform the market that reveals he's got the right stock picking stuff. But his ability to outperform when the going gets tough is what is of interest here and now. He's the only Fidelity growth fund manager to have out-performed the market heading into and during the last two recessions. His eclectic, contrarian portfolio, which enables him to hunt across all capitalizations and styles, is a core strength and makes him an excellent choice as a core holding in fair and ill winds.
"Buy Dividend Growth (FDGFX ). Manager Mangum's strengths, although he'd argue this point, are defensive in nature and result. I have long argued that Charles' strengths correlate to healthcare's performance. It is his biggest overweighting (25% vs. 13% for the S&P 500), and hence basically dictates the return outcome of the fund vs. his benchmark. But there's something else to note about this correlation: Healthcare names usually percolate when the going gets tough for other areas of the market. It is a canary in the coal mine, and Mangum knows how to see and maneuver in dark times. Longstanding members know that we held this fund for superb defense; in 2000 he was up 12% when the S&P 500 was down 9.1%, but a markedly less stellar offense when the market started climbing in '03: Mangum was up 23% when the S&P 500 was up nearly 29%. But over the time we held him (1/1/98-4/22/05) he delivered 55.3% vs. 32.3% for the S&P 500, with less risk.
"Buy Low-Priced Stock (FLPSX ). Fund manager Joel Tillinghast's inimitable investment style and stock picking acumen heading into and through a recession are inarguable. He trends to lag as the recovery from the recession gains steam, and we've trimmed our stake in him a bit, but remain confident that he adds both defensive and offensive upsides in this environment. Tillinghast has also been doing some trimming himself; his current holdings number 855, down from over 1200 a few months ago."