Disciplined Growth Investors has launched their second mutual fund, the Disciplined Growth Investors Equity Fund (DGIQX). The fund is only nominally “new.” It technically launched on January 26, 2026, by way of a section 351 conversion (a sort of “in-kind exchange” that allows investors to avoid tax bills when exchanging one set of assets – say, appreciated stocks – for another, such as a fund or ETF) from a long-running limited partnership, Navigator Investors, LP. It opened to new investors on February 26 and will retain the partnership’s performance track record dating back to March 31, 1997. Over the ten years through December 2024, the Navigator fund returned 13.2% while its benchmark Bloomberg Mid-Cap Growth Index, returned 10.7%. Their flagship DGI Fund opened in 2011, and we profiled it in 2022. The Equity Fund is 100% stocks, while the balanced fund is 70% stocks, 30% bonds, with a mid-growth bias. The stocks in both portfolios are identical.
Two things to consider.
One, Disciplined Growth Investors, the balanced fund, is pretty successful and pretty distinctive.
The DGI portfolio has a far lower market cap and far greater growth tilt than its Morningstar peers. That has translated to both higher volatility (maximum drawdown, standard deviation, downside deviation) and higher absolute returns (by 270 bps annually since inception) than its peers. The equity portfolio is concentrated (44 names) and has low turnover (17%). It currently has 250% of the tech exposure of its Morningstar peers.
2025 was not kind to the fund’s strategy, which returned 3.5% to its peers’ 14%. That said, it has doubled the returns of its peers over the first couple of months of 2026 (7.3% versus 3.8%) and has outperformed the group over the past 3-, 5-, and 10-year periods, and since inception. About 2025, our contact at the fund notes:
Marketers and market timers, we are not. Fred Martin started DGI in 1997, which was perhaps the worst time to start an actively managed, valuation-focused investment effort. The last 18 months have been similarly challenging for fundamentals-focused managers in a time of rampant speculation and overvaluation at the top end of the S&P 500, a dynamic even more extreme in the NASDAQ and Russell Mid Cap Growth indices. While we don’t jump and click our heels during times like these, we’ve experienced them before. As Fred often says, “It can’t continue, so it won’t.”
Two, their business model is old-school. The advisor’s website is … let’s call it “Spartan.” Most of the useful information is tucked away in a section called Geeks + Lawyers, then Literature. And you can only invest in the fund directly through the advisor; neither Schwab nor your financial advisor will get you in. Their argument is that this allows them to know their investors, to communicate directly with them, and to eliminate one layer of fees.
The minimum initial investment is $10,000 or $100/month with an automatic investment plan. The all-in fee is 0.85%.
You can find the prospectus here and the statement of additional information here.
