Four Undiscovered Value Funds
These winning funds have escaped investors' notice--and asset bloat.
There’s no doubt about it: Value is in. Over the last few years, value offerings have enjoyed a long run of outperformance versus growth, and that has spurred huge inflows into some of the best value managers such as Dodge & Cox, Royce, and American. So, if you're searching for a value fund that’s escaped amassing a bloated asset base, you’ve got to look hard.
While there aren’t a lot of attractive funds that qualify for this category, I was able to come up with a few names. I screened for funds with small assets, modest expenses, and decent performance. Before I disclose which funds made the grade, I should explain that I’m not recommending you make a big bet on value. The markets look rather risky to me, so it seems the prudent thing to do is stay diversified across the Morningstar style box and keep a decent amount of money invested overseas and in bonds.
American Century Capital Value Inv (ACTIX)
It’s easy to see why American Century’s value funds escape notice. They’re not exciting. With funds such as Clipper (CFIMX), you get big stakes in stocks that take five years to pay off or bold shifts into bonds when everyone else is in love with stocks. But this fund doesn’t make huge bets or do much of anything to call attention to itself. As result, the managers who run this fund have less than $1 billion under management.
Russel Kinnel does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.