Good Bets for a Rebound
The tech rally and value slump have been headwinds for these Morningstar Medalists, but don't count them out.
This article was originally published in the July 2017 issue of Morningstar FundInvestor. Download a complimentary copy of FundInvestor here.
The biggest risk facing investors today may be FOMO--fear of missing out.
With most stock and bond market indexes posting solid gains and volatility muted, investors have had little to fear from losses this year: All but a few dozen funds in the Morningstar 500 finished 2017's first half in the black.
The biggest gains among diversified funds were had by pure growth funds like
Investors holding funds with more-subdued returns may feel as if they're missing out, but they should remember many of 2017's winners looked pokier in 2016. Inevitably the cycle turns, and funds posting more-modest results will have an opportunity to shine. The Morningstar Medalists discussed below have been laggards this year, but they are likely to excel in more-favorable climates.
De-FAANGed
Growth funds with no exposure to the so-called FAANG stocks--
Role Reversal
After a strong 2016, small-value stocks fell from favor in 2017's first half.
While large-value funds struggled less, the category has lagged in 2017.
Caution Amid the Hype
Mixing a strict value discipline with a willingness to hold cash when bargains are scarce usually leads to market-lagging results as bull markets wear on. This year hasn't been an exception.
Funds with similarly sized cash weightings, such as