Video Reports

Embed this video

Copy Code

Link to this video

Get LinkEmbedLicenseRecommend (-)Print
Bookmark and Share

By Russel Kinnel and Christine Benz | 03-12-2014 03:00 PM

3 Noteworthy Fund Boutiques

These smaller fund firms may be off your radar, but they're worth a closer look, says Morningstar's Russ Kinnel.

Christine Benz: Hi, I'm Christine Benz for

Big fund firms like Vanguard and T. Rowe Price house the lion's share of assets, but smaller shops merit attention, too.

Joining me to discuss the best of the fund boutiques is Russ Kinnel, director of fund research for Morningstar.

Russ, thank you so much for being here.

Russ Kinnel: Good to be here.

Benz: Russ, you brought a short list--and of course there are more boutiques that we like--but you brought along three firms that you think do a really good job in their respective areas.

The first one you want to talk about probably won't be a familiar name to many of our viewers; that's Akre. They run a single fund, single strategy. Let's talk about why you think the firm is good at running that mid-cap growth strategy.

Kinnel: It's Chuck Akre, assisted by three analysts. It's a focused growth strategy. It's a little different from anything you see elsewhere in terms of, they'll run cash, it's a focused growth fund, but it doesn't chase the really fast growers. He calls them "compounding machines," or the "three-legged stool" that he is looking for, which really leads them to some consistent growers, but not the most hyped stocks out there. So, it's a very distinctive strategy.

Benz: You mentioned that they'll sometimes hold cash.

Kinnel: Yes, that's right. They'll hold cash. When he started the fund a few years ago, he started off with a big cash pile and slowly whittled it down.

In a lot of ways, I feel like it's just a distinctive strategy you wouldn't see elsewhere, but executed very well. He's done very well here and at his previous fund.

We rate Akre Focus Silver. We recently raised it from Bronze to Silver. I think when you have boutiques, you get that laser-like focus. Here is the strategy, this is what everyone does, and I really like that.

Benz: They are not trying to be all things to all people.

Kinnel: Not even close.

Read Full Transcript

{0}-{1} of {2} Comments
{0}-{1} of {2} Comment
  • This post has been reported.
  • Comment removed for violation of Terms of Use ({0})
    Please create a username to comment on this article