Susan Dziubinski: Hi, I'm Susan Dziubinski with Morningstar. When assigning Morningstar Analyst Ratings, we focus on managers with disciplined approaches that we think will outperform during a full market cycle. But that doesn't mean there won't be some dry spells along the way. Here are three Gold-rated funds that are struggling in this year.
Alec Lucas: Gold-rated Primecap Odyssey Growth is having a tough year thus far in 2019. It's up more than 12% through June 27, but that lags the more than 20% gain of the Russell 3000 Growth Index, and it places the fund near the bottom of its large-growth Morningstar Category. Healthcare holdings have hurt the fund thus far in 2019. For example, it had a top 25 position in Biogen in March when that company's share price plunged 29% in a single day because of the failure of a late-stage Alzheimer's drug. Other holdings that have hurt the fund include Abiomed and the biotech firm Alkermes. The fund, though, maintains one of the best records in the Morningstar large-growth category since its inception, thanks to those kinds of picks. Its managers tend to be patient with their stock picks, and they have a tremendous tolerance for pain. Investors have to as well, and this year is a reminder that, to succeed with this fund, you have to have the kind of patience that its managers do.
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Dan Culloton does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.