3 Great Funds Having a Lousy Year
These Gold-rated funds are in a dry spell.
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.
Dan Culloton does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.