These Funds Are Oldies but Goodies

In short order, Hollywood will begin cranking out hundreds--literally--of new TV shows. But don't get too attached. Fewer than half are likely to make it into their second season, if previous years' survival rates are any guide. For every successful, long-running series like Friends and The Office, there are an equal number of short-lived flops like Cop Rock and The Hasselhoffs.

The mutual fund industry has a similar track record of launching products that fail to take off. Morningstar's director of manager research, Russ Kinnel, reports that a little less than half of the funds that were around 10 years ago were merged away or liquidated over the ensuing decade. Moreover, an additional 6,000-plus funds that were created within the past decade have been shuttered. Among the funds that have gone extinct, weak performance, small asset bases, or both are recurrent themes. That's why Russ often talks about "success ratios": Outperforming is important, but so is survival. If a fund has good performance but doesn't gain assets and ends up being merged into something else, it hasn't been successful for its shareholders.

Yet despite the industry's weak overall record for launches, some funds have had serious staying power. Not only have they stood the test of time, but they're still worth owning today. To help shine a light on these oldies but goodies, I used Morningstar's

to identify medalist funds--those that our manager research analysts bless with a strong endorsement--that had inception dates of 1950 or before. I excluded funds that are closed to some or all investors, a step that kicked out venerable options like

In addition to serving up some core investment ideas, the list provides an interesting history lesson on the fund industry. First, the majority of funds on the list hail from what we think of as "load" mutual fund firms, evidence of the fact that most early investors in open-end mutual funds had to use a broker to buy and sell funds. Scudder, Stevens and Clark created the first no-load fund in 1928, but no-load funds for do-it-yourself investors didn't gain serious traction until the 1980s.

Second, investors will notice that all of the funds that made the cut focus on stocks or a combination of stocks and bonds; in the early days of mutual funds, most investors stuck with individual bonds for their fixed-income exposure. Balanced and allocation funds have an outsize footprint on the list. Vanguard Wellington was the original "allocation" fund, combining stocks and bonds, but Dodge & Cox Balanced (1931) wasn't too far behind.

Finally, in contrast to the scores of trendy, ripped-from-the-headlines mutual funds that launched and quickly fizzled with their chosen trends, the group of topnotch survivor funds is the essence of utilitarian. They employ sensible strategies that put a premium on diversification and emphasize road-tested factors such as dividends, low share prices, and business quality.

Premium users can click

to see the list of "oldies and goodies" including both load and no-load funds. Here's a closer look at some of the funds with Silver and Gold ratings that made the cut.

American Funds Investment Company of America

AIVSX

Category: Large Blend Analyst Rating: Silver Inception Year: 1934

As with many of the funds on the list, not only has this fund been around a long time, but it also benefits from highly seasoned management. James Lovelace and Donald O'Neal both joined the fund in 1992; the newest manager on the team, Bradley Vogt, has been with parent company Capital Group for almost three decades. As with all of Capital's offerings, each manager runs a component of the portfolio independently; analyst Alec Lucas says that setup facilitates diversification of strategies and ideas and also helps reduce the impact of manager changes. Although the fund is enormous, with more than $70 billion in assets, Lucas notes that it has beaten the S&P 500 in more than 70% of rolling 10-year periods, while besting the category average in 100% of rolling 10-year periods.

Dodge & Cox Balanced

DODBX

Category: Allocation—50% to 70% Equity Analyst Rating: Gold Inception Year: 1931

Although siblings

T. Rowe Price Balanced

RPBAX

Category: Allocation—50% to 70% Equity Analyst Rating: Silver Inception Year: 1939

This fund didn't launch under the T. Rowe umbrella; the firm acquired the original fund from another management company, USF&G, and merged it into its own balanced fund the early 1990s. (