Mining for hidden gems among funds

David_Snowball

Five small fund recommendations from a Wall Street Journal story. One fund rec each from me (Pinnacle Value), Bob C (Artio US Smallcap), Johanna Turner (a friend of the Observer who offered Marathon Value), Russ Kinnel of Morningstar (Bogle Small Cap Growth) and Todd Rosenbluth of S&P Capital IQ (Government Street Equity). In all honesty, I've never heard of the latter but will go learn something.

http://online.wsj.com/article/SB10001424052970204224604577027840539523920.html

As ever,

David

kevindow

Hi David,

My thoughts:

Pinnacle Value (PVFIX): Among domestic SCV funds holding a lot of cash, ARVIX is a much more attractive fund, and we own it. ARVIX will close to new investors on 12/7/11. Eric Cinnamond has had a great track record at ICMAX and then at the current fund he manages, ARVIX.

Artio US Small Cap (JSCAX): BCSIX and RHJMX are more attractive in the domestic SCG space, and have lower expense ratios.

Marathon Value (MVPFX): In this space, I continue to favor YAFFX which has outperformed MVPFX YTD, and over the past 1-year, 3-years, 5-years, 10-years, and since inception of MVPFX.

Bogle SCG (BOGIX): John Bogle Jr. has had underwhelming performance managing this quant fund, so why has M* decided to grant it a "Gold" designation for expected future performance ? I posit that if the manager had a name other than "Bogle," this fund would not have such a designation. I see no objective evidence for the designation, other than "hope" that quantitative investing will somehow work going forward. If quant investing was the answer, what happened to the ethically awesome, super-intelligent, but performance-challenged John Bridgeway ? I would favor BCSIX and RHJMX in this space.

Government Street Equity (GVEQX): This is an attractive fund, but I prefer FMIHX as it has been a consistent performer, and has outperformed GVEQX over the past 5- and 10-year periods.

Kevin

MikeM

Reply to @kevindow:
There are many good managed funds out there. It is easy to 'collect' many of these funds. For myself, I found it is beneficial to limit the number of funds I own. And in doing so I try to keep no more than 12 funds in my 'core' holdings portfolio. With that, Kevin, I agree with you that in the small cap field, ARIVX is my top choice and for large caps it's tough to beat the Yacktman funds - so YAFFX is my choice. These 2 funds are my only 'pure' U.S. equity mutual funds. The others sound great but do I need them? Naa. I'll stick with my consistent manager with his consistent style.

Thanks for the input.

BobC

Hi Kevin. What David did not tell you is that the reporter had us limit our funds to those who are under $100 million in size. Even if I had wanted to include your two funds, they would have been excluded since they are both over $1 billion in total assets. It was not a particularly easy assignment, as I am sure you will discover when you limit the screen with that requirement.

kevindow

Reply to @BobC:

Thanks Bob for the clarification, and for all of your contributions on this forum. Yes, you had a difficult task.

Kevin

Investor

Reply to @BobC: Oh, that is a very hard constraint. I am looking at Conestoga Small Cap (CCASX) but it has assets around $170Mil. Perhaps, David can have this fund in his microscope some time.