Our Analysts' Favorite Core Concentrated Funds
These funds may reward investors with long time horizons and the wherewithal to hang in amid underperformance.
Susan Dziubinski: Hi, I'm Susan Dziubinski for Morningstar.com. Equity investors generally prefer low-cost, well-diversified funds at the core of their portfolios. However, when used correctly, a concentrated fund run by an established, successful stock-picker may provide excess return over time to an otherwise diversified portfolio. Keep in mind though that concentrated funds require very long time horizons, and investors should have the wherewithal to hang on during the inevitable streaks of underperformance. That being said, we asked our analysts for some of their favorite core concentrated funds.
Alec Lucas: FMI Large Cap is a concentrated, value-leaning fund run by Fiduciary Management Incorporated based in Milwaukee. It's team-managed. Pat English is the longtime manager of the fund and he is backed by a sizable team including research director Jonathan Bloom. It invests in roughly 20 to 30 stocks. Portfolio turnover is low, and the managers aren't afraid to hold cash when valuations are stretched, which they believe they are currently.
Greg Carlson does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.