3 Promising Stock Funds to Watch in 2023

Stephen Welch: Morningstar’s manager research team maintains what we call a Prospects list of interesting strategies, new funds, or under-the-radar managers that we’re considering bringing to full analyst coverage.

Today, let’s look at three of the stock funds on our 2023 Morningstar Prospects list.

3 Promising Stock Funds to Watch in 2023

1. Capital Group Core Equity ETF CGUS
2. Dodge & Cox Emerging Markets Stock DODEX
3. Jensen Quality Value JNSVX

Capital Group Core Equity ETF is in the large-blend Morningstar Category and is one of a handful of active ETFs Capital Group launched in 2022. It utilizes the firm’s characteristic multimanager approach, giving investors access to several variations to large-cap investing. Six experienced managers each take a broad flexible approach to identify durable companies with the potential for growth or stable payouts. This wrapper is also low-cost and should be more tax-efficient than a similar mutual fund counterpart.

Dodge & Cox Emerging Markets Stock is in the diversified emerging-markets category and wades into new territory for the firm. The fund adopts the firm’s proven, valuation-driven approach but also utilizes a quantitative model to help the team find attractive opportunities. This leads to a more expansive portfolio than a typical Dodge & Cox equity strategy. However, the firm has succeeded with every other strategy it has launched in its 93-year history, and coupled with a relatively cheap expense ratio, it is an appealing option.

Jensen Quality Value is in the mid-cap blend Morningstar Category. This strategy shares parts of the team and process behind Silver-rated Jensen Quality Growth JENSX, however, this one focuses more on valuation and companies down the market-cap spectrum. It tends to hold companies with economic moats, strong balance sheets, and solid profitability, helping the strategy hold up better in times of distress.

Watch “3 Great Growth Funds for 2023″ and “3 Great Funds for Your IRA in 2023″ for more investment ideas.