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3 Great New Funds

These funds may be new, but they look a lot like proven older funds.

3 Great New Funds

Russel Kinnel: In general, we want to see a fund build a track record and accumulate assets before we recommend it. But we do make exceptions. Today, I’ve got three funds that are three years old or younger but still earn a Bronze rating.

3 Great New Funds

  1. First Eagle Small Cap Opportunity FESAX
  2. Dodge & Cox Emerging Markets Stock DODEX
  3. Vanguard Global ESG Select Stock VEIGX

The youngest is First Eagle Small Cap Opportunity, launched in July 2021. The manager and strategy are well-tested, however. Bill Hench and team ran a deep-value strategy for Royce, and then they left Royce to join First Eagle. They brought their same extreme-value approach over, and you see a lot of similarities in the funds. They look for small, super cheap companies with depressed earnings. It’s a formula for big ups and downs, but, in general, things have worked out nicely over the long haul.

Dodge & Cox Emerging Markets Stock launched in May 2021 and has a very proven team and a mostly proven process. The firm’s equity funds earn high marks for a value approach, and we love their deep, experienced teams. The fund also has the low expenses we’ve expected and enjoyed at other Dodge & Cox funds. However, there is one aspect that requires a leap of faith: Dodge is employing quantitative screens at this fund to go along with fundamental stock selection—something we haven’t seen from them before. The quant screens are meant to simulate the fundamental process at their other funds so that the style comes out the same. But we don’t yet know if the screens are equal to the analysts’ work they use at other funds.

Finally, Vanguard Global ESG Select Stock is another combination of tried and true with something new. The fund is run by Wellington, which has done a great job on many Vanguard funds, and it uses ESG characteristics that have worked well at other Wellington-run funds. So far, results have been quite good, but the fund was only launched in 2019, so it still has a lot to prove.

Watch “4 Great Dividend Funds” for more from Russel Kinnel.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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About the Author

Russel Kinnel

Director
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Russel Kinnel is director of ratings, manager research, for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. He heads the North American Medalist Rating Committee, which vets the Morningstar Medalist Rating™ for funds. He is the editor of Morningstar FundInvestor, a monthly newsletter, and has published a number of prominent studies of the fund industry covering subjects such as manager investment, expenses, and investor returns.

Since joining Morningstar in 1994, Kinnel has analyzed virtually every type of fund and has covered the most prominent fund families, including Fidelity, T. Rowe Price, and Vanguard. He has led studies on the predictive power of fund data and helped develop the Morningstar Rating for funds and the Morningstar Style Box methodology. He was co-author of the company's first book, Morningstar Guide to Mutual Funds: 5-Star Strategies for Success (Wiley, 2003), and was author of the book Fund Spy: Morningstar's Inside Secrets to Selecting Mutual Funds That Outperform, published in 2009.

Kinnel holds a bachelor's degree in economics and journalism from the University of Wisconsin.

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