Long Track Record in Picking Mutual Funds

Steven T. Goldberg
Tweddell Goldberg Investment Management

teven Goldberg says he is most excited about mutual funds whose fund families or managers have delivered stellar returns over very long periods. One of the fund families he especially admires is Dodge & Cox, which has been managing money since the 1920s.Here are three of Goldberg's fund picks...
Dodge & Cox International Stock Fund (DODFX). This fund has very low expenses for a foreign fund and provides an opportunity to invest with one of the nation's premier companies managing large-cap, value-oriented funds. The fund's record is fantastic. Its annualized return for the past five years is 22%, as of January 31, which is five percentage points higher than its foreign benchmark index. The wildly popular domestic Dodge & Cox Stock Fund is closed to new investors, and it's likely that Dodge & Cox International also will be shuttered some day.
Legg Mason Opportunity Trust Fund (LMNOX). This fund has been unfairly hidden in the shadows of its famous cousin, Legg Mason Value, which before 2006 had enjoyed a 15-year consecutive streak of beating the Standard & Poor's 500 stock index. What very few people realize is that Legg Mason Opportunity, since it was launched in late 1999, has outperformed the highly touted Legg Mason Value in every calendar year. Both funds are managed by Bill Miller, who is possibly the best fund manager of our time. Miller has more flexibility with Legg Mason Opportunity because he can invest in stocks of any size. The fund's annualized return over the past five years is 17%, which is 10 points better than the S&P 500.
Marsico Flexible Capital Fund (MFCFX). The fund just launched in January, but other funds managed by Marsico Capital Management have delivered strong returns since Tom Marsico founded the firm in 1997. (Before that, Marsico managed the Janus Twenty Fund for 10 years.) Investing in this fund, which is managed by Cory Gilchrist with a lot of input from Marsico, can be a great way to diversify your portfolio because it contains a mix of investments that you won't often find elsewhere. About 12% of the fund is dedicated to "junk" -- or high-yield -- bonds, while the rest is devoted to stocks. The fund tends to gravitate to complicated companies that are not well understood by many analysts and whose stocks are often mispriced, providing opportunties. This fund's yield is 5.5%, which will appeal to some investors looking for income.