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Taking a Hint From Warren Buffett

Funds with big industrial and energy stakes that may be on Warren's wavelength.

The article was published in the September 2015 issue of Morningstar FundInvestor. Download a complimentary copy of FundInvestor here.

Warren Buffett in August made

To follow Buffett's lead on this theme you could pick a beat-up fund that invests heavily in industrials and energy. I looked for diversified funds in the Morningstar 500--the Morningstar FundInvestor newsletter's list of funds that should be on investors' radars for management, process, stewardship, track record, and fees--with the most combined investments in those sectors. Naturally, most have poor recent performance because of their investments in those lagging sectors.

Lateef LIMAX doesn’t own any energy names, but it has a huge 36% of assets investment in industrials. Because it doesn’t have energy, performance has merely been mediocre of late. The fund tends to focus a little higher on the quality spectrum than Delafield, as it has both industrials such as Westinghouse Air Brake Technologies WAB alongside growth and technology sector favorites such as

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About the Author

Russel Kinnel

Director
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Russel Kinnel is director of ratings, manager research, for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. He heads the North American Medalist Rating Committee, which vets the Morningstar Medalist Rating™ for funds. He is the editor of Morningstar FundInvestor, a monthly newsletter, and has published a number of prominent studies of the fund industry covering subjects such as manager investment, expenses, and investor returns.

Since joining Morningstar in 1994, Kinnel has analyzed virtually every type of fund and has covered the most prominent fund families, including Fidelity, T. Rowe Price, and Vanguard. He has led studies on the predictive power of fund data and helped develop the Morningstar Rating for funds and the Morningstar Style Box methodology. He was co-author of the company's first book, Morningstar Guide to Mutual Funds: 5-Star Strategies for Success (Wiley, 2003), and was author of the book Fund Spy: Morningstar's Inside Secrets to Selecting Mutual Funds That Outperform, published in 2009.

Kinnel holds a bachelor's degree in economics and journalism from the University of Wisconsin.

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