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By Russel Kinnel and Christine Benz | 01-20-2016 12:00 AM

6 Funds That Stand Tall Amid 2016's Market Rout

Defensive-minded funds holding cash, gold, and high-quality companies have tended to outperform peers so far this year, says Morningstar's Russ Kinnel.

Christine Benz: Hi, I'm Christine Benz for The U.S. market is off to its worst early-year showing in history. Joining me to discuss a group of funds that have held up fairly well amid the rout is Russ Kinnel--he's director of manager research for Morningstar.

Russ, thank you for being here.

Russ Kinnel: Good to be here.

Benz: We're more than midway through January; it's been a very tough year for investors, really, across the board--unless they happen to be in Treasuries with their portfolios. Let's talk about a select list of funds that you took a look at that have actually held up pretty well amid this period of broad market weakness. A couple of the funds that have performed really well are foreign-stock funds. These are funds that you say you're not surprised to see holding up quite well amid this tough environment. Let's start with IVA International (IVIOX). That's the first fund on your list.

Kinnel: That's right. And I would add, as a note of caution, too: All of the funds we're going to talk about today are funds that have lost money. Just about any equity-owning fund is in the red; but if you can lose 5% or 10% less than your benchmark and peers in a down market, that's a great way to beat the index, especially on a risk-adjusted basis. And of course, it's a very welcome thing to do. IVA International is a fund that is very defensive, so we expect it to do well. Though, it's still encouraging that it's done well. It holds some gold, it holds a lot of cash, and it's also invested in defensive stocks--meaning companies that tend to hold up well. So, it's a fund very much focused on capital preservation, and we're seeing it do that so far this year.

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