6 Funds That Focus On Investment Categories That Could Be Due For A Rebound This Year
The categories that saw the highest redemption levels last year were large growth, large blend, and world stock, says Russel Kinnel, Morningstar's director of mutual fund research.
According to the research firm’s “Buy the Unloved” theory, now may be a good time to invest in low-cost ETFs and other funds that focus on these “unloved” categories.
By contrast, the categories with the biggest inflows last year were diversified emerging-market funds, commodities broad basket, and foreign large growth (excluding allocation and bond categories).
The “Buy the Unloved” strategy calls for investors to buy the unloved categories, sell the loved categories, and hold for three to five years before repeating the process. Since 1994 the strategy has returned an annualized 8.98%, compared with 7.42% for the S&P 500 Index.
Kinnel lists six funds that focus on last year’s most unloved categories: Primecap Odyssey Growth (POGRX), T. Rowe Price New America (PRWAX), Longleaf Partners (LLPFX), FMI Large Cap (FMIHX), Oakmark Global (OAKGX), and Mutual Global Discovery (TEDIX).