This Worthy Mid-Cap Fund Could Close Soon

Laura Lallos: We recently confirmed Morningstar Analyst Ratings of Silver for two funds from Burlington, Vermont, boutique Champlain Investment Partners.

Champlain Small Company (CIPSX) is the better known of the two, with a top-decile performance in the small-growth category over the past decade. It is currently closed to new investors, though.

However, Champlain Mid Cap (CIPMX) is a worthy alternative. It is also run by a long-tenured team led by firm co-founder Scott Brayman and emphasizes companies with low debt and quality earnings, with a strict valuation discipline. That's not a recipe for success in bull markets, but it has led to strong long-term risk-adjusted returns.

About 20% of Mid Cap's assets are in smaller-cap names also held in the Small Company fund, including molecular diagnostics firm Cepheid (CPHD), where volatility this year caused the managers to first take profits, then rebuild the position--illustrating their valuation discipline.

Shareholders benefit when management closes a fund to protect its strategy--and the Mid Cap fund is likely to close before the $5 billion point. 

One beef with both funds: They have above-average expenses. But despite that hurdle, they've both outperformed their category peers in the past five years--with less risk.