In the mutual fund industry these days, sometimes it pays to be a little more like David and lot less like Goliath.
As many individual funds continue to insist upon growing assets rather than remaining nimble, a new report from Kiplinger's Personal Finance Magazine maintains, a few new funds with proven managers have emerged as gems in an increasingly crowded market.
Twenty months after leaving Meridian Value Fund as its co-manager, Kevin O'Boyle has started the Presidio Fund. O'Boyle posted a fine track record at Meridian Value - its assets ballooned by $1.5 billion during his tenure - but now he's running a tiny fund where he can focus sharply on relatively few companies and deftly move in and out of those companies without causing a fervor in the market.
"I'm thrilled to be back," O'Boyle said. "I'm running my own business and I'm more in control of my own destiny than ever before."
Sure, Kiplinger's noted, the luster can wear off new funds quickly, which is why veteran managers, like Joe Reiland at the recently American Century Focused Growth Fund, are so important.
Reiland and co-manager Greg Woodhams plan to stick with rapidly growing companies and a portfolio that numbers between 25 and 45 stocks. "We have a lot of latitude to pursue opportunities without style or sector constraints," Reiland said.
Based on the resounding success of its predecessor, Fidelity Investments' newest overseas offering, the International Small Cap Opportunities Fund, should soar. After all, its big brother, the International Small Cap, gained 80% in its first full year and has since been closed.
Andrew Sassine, who has spent the last six years living overseas as a Fidelity analyst, will manage the Small Cap Opportunities fund. Running a foreign has been a longtime dream, he said. He plans to invest 20% in emerging markets, and 10% to 20% in small companies here in the U.S.
And finally, there's David Green's Wintergreen Fund and the William Blair Emerging Markets Growth Fund, which is co-managed by George Greig and Jeff Urbina. Green recently left the helm of the wildly successful Franklin Mutual Series Funds, where he guided the Mutual Discovery Fund to big gains. Wintergreen will employ the same model. The new William Blair fund seeks "companies whose managers have the ability to execute their business plan and have a vision for where they're taking the company," Urbina said.
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.