Four Under-the-Radar Picks
They're not hot performers, just funds that have gradually built strong records.
In the old days, the manager of a stock fund could put up good numbers for a few years, then sit back and watch the money roll in. That's not the case today. Of course, chasing the hottest funds isn't such a hot idea. But neither is avoiding stocks altogether, which is evidently the current strategy of many shell-shocked investors. Enough already. It's time to stop fighting the last war.
If you're ready to give stocks another try--or you never abandoned them in the first place--I've got a few names for you to consider. These funds aren't new, and they aren't hot performers. They are simply funds that have gradually built strong records. The closer we looked at them, the more we were impressed. In recent months, we've added them to our list of Fund Analyst Picks.
Vanguard Dividend Growth (VDIGX) benefited from two key changes a few years back. In late 2002, Vanguard changed the fund's mandate so that instead of focusing on utility stocks, it would follow a dividend-growth strategy. The emphasis on dividend growth rather than yield pushed the fund to invest in healthier companies than it might have otherwise owned. That helped it avoid the losses many other dividend-oriented funds suffered during the recent market cataclysm. And in 2006, the fund's advisor, Wellington Management, put Don Kilbride in charge. He has now run the fund long enough for us to judge his abilities, and we like what we see. As you would expect with a Vanguard fund, annual expenses, at 0.36%, are quite low.
Russel Kinnel has a position in the following securities mentioned above: MACSX. Find out about Morningstar’s editorial policies.