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This Gold-Rated Fund Follows Its Rules

This Gold-Rated Fund Follows Its Rules
Securities In This Article
FMI Common Stock Investor
(FMIMX)

Alec Lucas: Gold-rated FMI Common Stock is an outstanding contrarian, yet cautious, option for small- and mid-cap exposure.

Led by CIO and longest-tenured manager Patrick English and research director Jonathan Bloom, FMI’s stable 10-person management team runs this fund with a collaborative, high-conviction approach. It is focused on profitable companies with market caps below $5 billion at purchase and aims to buy them when they are trading at bargain prices; that often comes amid controversy or uncertainty. For example, the managers bought property and casualty insurer WR Berkley in late 2009 when the market was still suspicious of financials stocks. Its market cap has since more than doubled to $10 billion. FMI keeps tabs on liquidity in the fund's 40- to 50-stock portfolio and doesn't hesitate to close it to new investors to preserve flexibility. The portfolio doesn’t look like the Russell 2000 Index in terms of its sector exposures or in other respects nor does it behave like that index. It has, however, consistently lost less than the index in stress periods, including late 2018’s near bear market. That’s led to index- and peer-beating results over the long term.

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About the Author

Alec Lucas

Director of Manager Research
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Alec Lucas is director of manager research, active funds research, for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. He is a voting member of the Morningstar Medalist Ratings Committee for U.S. and international fixed-income strategies, covers fixed-income strategies from asset managers such as Baird and American Funds.

Lucas is also active in parent research. He is a voting member of the U.S. parent ratings committee and previously served as the lead analyst for Franklin Templeton, Capital Group, and Vanguard, among other firms.

Lucas was a strategist on Morningstar's equity strategies team prior to assuming his current role in June 2022. He covered equity strategies from asset managers such as Primecap and American Funds and received the 2019 Citywire Professional Buyer Rising Star Award.

Before joining Morningstar in 2013, Lucas worked as a minister as well as a professor for Loyola University Chicago, among other institutions. From 2010 to 2011, he was a Fulbright Scholar at the University of Heidelberg.

Lucas holds bachelor's degrees in philosophy and classics from the University of Missouri-Columbia, where he graduated summa cum laude and with departmental honors, and a Master of Divinity, summa cum laude, from Trinity International University. He also holds a doctorate in theology, with distinction, from Loyola University Chicago and has published several articles and one book within that field.

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