• / Free eNewsletters & Magazine
  • / My Account
Home>Research & Insights>Investment Insights>The Most Promising Funds Launched in 2011

Related Content

  1. Videos
  2. Articles
  1. Carlson: Investors Got Complacent About Emerging Markets

    Morningstar's 2011 Fixed-Income Manager of the Year John Carlson outlines his strategy for Fidelity New Markets Income going into last year and what he expects for 2012 and beyond.

  2. Checking the Scorecard on Fidelity Funds

    Morningstar senior fund analyst Christopher Davis sizes up performance and stewardship at the fund family and discusses some of his favorite Fidelity funds.

The Most Promising Funds Launched in 2011

These promising funds may belong on your watchlist.

Russel Kinnel, 01/23/2012

This article originally appeared in Morningstar FundInvestor.

There were a lot of trendy and unproven fund launches in 2011. For the most part, you can simply tune that news out. However, there are always a few promising names worth adding to your watchlist and occasionally even worth buying. The key is to find funds with proven managers and sound strategies so that there's more to go on than just a few months' returns. I'll save you the time of wading through all the flotsam by highlighting a few of the very best.

Fidelity Municipal Income Funds
As I wrote last year, Fidelity has launched four defined-maturity muni-bond funds. They "mature" in 2015, 2017, 2019, and 2021. The idea is that duration (a measure of interest-rate sensitivity) will decline as the maturity date nears just like with a bond. Soon after the date of maturity (June 30), the funds will liquidate and the balance will be returned to shareholders.

The funds' aim is to produce as high an income stream as possible up until the maturity date while still maintaining principal. Thus, you can dial in the right maturities for your needs. The advantages over an individual bond are that Fidelity can get better prices than you can, can do better credit research, and can build a diversified portfolio to smooth out returns. Expenses are low--around 0.40%--and management is sound.

TCW International Small Cap TGICX
This fund has a known commodity in its manager, even though the fund is brand new. Rohit Sah comes from Oppenheimer, where he built a strong record at Oppenheimer International Small Company OSMAX. His is a bold, high-risk style that requires a long holding period for investors. He builds a focused portfolio with huge regional biases. He hates Europe and loves Asia and Canada. He favors energy and other commodity-producing companies.

To put it another way, don't make this a core holding--it's too volatile for that.

The fund charges 1.44%, but there does seem to be room for that to come down as the management fee is 0.75%.

GoodHaven GOODX
I'd categorize this fund as intriguing rather than as one I'd buy right away. Its managers, Keith Trauner and Larry Pitkowsky, were comanagers on Fairholme FAIRX and are investing in a focused but cash-heavy style you'll recognize from Fairholme. However, GoodHaven is a new company, so I'd wait and see. We rate it Neutral for the time being.

Russel Kinnel is Morningstar's director of mutual fund research. He is also the editor of Morningstar FundInvestor, a monthly newsletter dedicated to helping investors pick great mutual funds, build winning portfolios, and monitor their funds for greater gains. (Click here for a free issue). Mr. Kinnel would like to hear from readers, but no financial-planning questions, please. Follow Russel on Twitter: @russkinnel.
blog comments powered by Disqus
Upcoming Events
Conferences
Webinars

©2014 Morningstar Advisor. All right reserved.