Hidden Gems 2002: Great Funds Flying under the Radar
These small funds deserve investors' attention.
At Morningstar, there are a few things we do at the beginning of each year. We rebalance our portfolios. We curse Chicago’s professional sports teams (in the post-Jordan era, anyway). And in our biweekly print publication,Morningstar Mutual Funds, we write about a few small, undiscovered funds with terrific prospects.
We’re not making the argument that tiny funds are always superior to larger offerings. Indeed, we found in a recent Morningstar Mutual Funds study that larger funds actually have delivered superior returns in some parts of the market, including large value. But a big asset base is undeniably a handicap in areas, such as small blend and mid-cap growth, where turnover rates are higher and the liquidity of individual stocks is lower. In the past, we’ve therefore profiled then-miniscule small-cap funds like Wasatch Small Growth (WAAEX) that have subsequently used their tiny asset bases to good effect.
Even in areas where the size of the fund and liquidity are less important, we think it’s worth highlighting a few terrific funds that haven’t yet captured investors’ attention. There are a lot of weak funds with big asset bases out there, and to the extent we can help steer folks to better alternatives, we’ll do so. This year’s selections are a varied lot, but they do have one thing in common: experienced managers with terrific track records. We’re delighted to give them some much-deserved attention.
Scott Cooley does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.
Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.
We’d like to share more about how we work and what drives our day-to-day business.
We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.
How we use your information depends on the product and service that you use and your relationship with us. We may use it to:
To learn more about how we handle and protect your data, visit our privacy center.
Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.
To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.
Read our editorial policy to learn more about our process.