Christine Benz: You have until April 15 to fund an IRA for the 2009 tax year, so all this week I'll be talking to some of Morningstar's experts to get their top picks for funding an IRA. Today I have Russ Kinnel with me. Russ is Morningstar's director of fund research. Russ, thanks for being here.
Russ Kinnel: Good to be here.
Benz: Russ, what's your top pick for funding an IRA?
Kinnel: I really like Primecap Odyssey Aggressive Growth. It's a mid-growth fund with about a five-year track record.
Benz: Tell us why you like it. Also, tell us why--I know there are some Vanguard funds run by this same team, but they're all closed. So you're throwing this one out as a good idea and it has nice low cost, too.
Kinnel: That's right. The Vanguard funds are all closed, but you can look at them and get an idea of what kind of track record to expect from this fund, which only has about five years of record.
But you have great management, great fundamental investors, which you don't often get on the growth side, and tremendous stability, which I also like in an IRA fund. Once you buy it, you don't want to keep messing with your IRA funds. These people are very stable management and just great investors.
Benz: This is a somewhat more aggressive fund, but it is somewhat valuation-conscious and a little different from other mid-cap growth funds in that turnover is nice and low.
Kinnel: That's right. They're patient, fundamental investors, and they don't get killed usually in bear markets. You can look at '08, and they lost money to be sure, but they lost less than others. If you look at the Vanguard funds, they lost less in the previous bear markets. So they do pay attention to valuations.
But they're great long-term investors, and this fund, amazingly, is still small. It's only about $600 million in assets. It really has just about everything you look for. I just think if you're looking for a fund to own for about 15-20 years, this is just a great one with tremendous appreciation potential.
Benz: OK, Russ, sounds like a good pick. Thanks for bringing it to us.
Kinnel: You're welcome.
Benz: Thanks for watching. I'm Christine Benz for Morningstar.com.