Some Mutual Fund Ideas

Mutual funds can help provide asset class diversification.  The following small and mid-cap funds and international funds look interesting.  The embedded links are to the funds’ web sites and to the Morningstar summaries (which may require logon to M* to view).

Closed End Funds

• Source Capital –> SOR is a value oriented fund that has outperformed the Russell 2500, S&P 500, and the NASDAQ for the past 1, 3, 5, 10, and 15 years
• Royce & Associates, a manager of portfolios of small- and micro-cap companies, has three closed end funds with excellent track records:  Royce Focus Trust (FUND), Royce Micro-Cap Trust (RMT), and Royce Value Trust (RVT)

Some Open-End Mutual Funds (that don’t suck)

• Neuberger Berman International Fund –> NBISK invests primarily in common stocks of foreign companies of all sizes in developed and emerging industrialized markets and has consistently outperformed the EAFE.
• Brandywine Blue –> BLUEX focuses on mid to large cap growth stocks and limits the portfolio to about 30 holdings
• Forward Hoover Small Cap Equity –> FFSCX has outperformed the Russell 2000 but it has a high expense ratio and has not performred as well as the Royce funds
• Third Avenue Value –> TAVFX is a mid-cap blend with a very good track record

For example, a diversified portfolio might include:

• 50% Large cap (35% Investment Club Units, 15% Source Capital)
• 30% Small- or mid-cap (15% Royce Value, 15% Royce Focus)
• 20% International (20% Neuberger Berman)