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Oppenheimer Quest Value Gets Revenge

Oppenheimer Quest Value sits pretty as growth stocks tank.


Things are looking up these days for Oppenheimer Quest Value Fund (QFVFX). After lagging the large-value category severely in 1998 and 1999, the fund's 12-month return lands in the large-value category's top quartile. It's only average relative to its peer group so far in 2001, but the fund held up much better than its peers did in 2000's fourth-quarter Nasdaq sell-off. Of course, a slim tech stake helped matters. But the fund is also heavy with financials like Freddie Mac (FRM) and Citigroup (C), which soared as rates flattened and fell last year. 

Though manager John Lindenthal hasn't done much to tweak the fund's sector weightings since coming on board in June 2000, he has added a few fallen-angel growth stocks that were pummeled in last year's sell-off. For example, he added Microsoft (MSFT) and Clear Channel Communications (CCU) late last year because he thought they were strong companies that had been oversold. Those picks have been successful so far this year. Lindenthal hasn't abandoned his value roots, however. Indeed, he's standing by the fund's financials stake even as the sector has struggled because of a weakening stock market and rising loan defaults in 2001. The fund has traditionally focused on financials, and Lindenthal says companies such as Citigroup and FleetBoston (FBF) still sport good managements and have solid market share in their industries. He's also hanging on to McDonald's (MCD). Even though the fast-food giant has run into trouble lately (the company's European sales have been adversely affected by mad cow disease), Lindenthal believes it's too cheap to sell right now.

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Catherine Hickey does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.