This week, two funds that are “on fire” and “peer shellacking” garner Gold ratings from Morningstar while another fund snags a bagel and a Negative rating for failing to deliver on its mandate.
The Templeton Developing Markets fund has “failed to deliver,” according to analyst Karin Anderson. She wrote that despite the managers' ability to invest with conviction, particularly throughout the past three-plus years, their stock-picking hasn't been strong enough to make this fund a standout in a category of 173 distinct participants.
“Looking longer term, the fund hasn't shown itself to be a stronger performer in either up or down markets of the past 10 years,” she added.
On the other hand, analyst David Kathman wrote that the PRIMECAP Odyssey Aggressive Growth “has been on fire lately” having been one of the hottest funds in the mid-cap growth category in 2012, with a 22% year-to-date return (as of Sept. 26) that tops the category rankings.
“Its longer-term record looks very impressive as well; it ranks in the category's top decile since the fund's November 2004 inception and has trounced the other five funds managed by the Primecap team during that time,” he wrote.
And the Oakmark International I has had “peer-shellacking returns during the course of manager David Herro's since-inception tenure have been the norm at this fund,” wrote analyst Shannon Zimmerman.
“So far, 2012 has been a characteristically strong year, with the fund's sixth-percentile showing through Sept. 25 powered partly by Diageo DEO. The spiritsmaker's shares have appreciated 32% in 2012 amid solid results and plans for expansion in emerging markets. Herro and comanager Rob Taylor trimmed their Diageo stake amid its rise, which is typical of their strategy.”
The contrarian fund also has an overweight position in Japan and some 30% of its assets invested in financial services names; the category norm is just 18.3%, according to Zimmerman.
