Yacktman, Dreman Differ on 'Value' Strategy

The bear market has been particularly harsh for value funds. The average large value fund dropped 40% during the year ending April 1, more than 3 percentage points worse than large growth, according to Morningstar.

Nervous investors have been dumping value funds. But before you sell, keep in mind that some value funds have proved relatively resilient. Such stable performers could be sound choices for investors seeking to build portfolios that can weather hard times.

For value portfolio managers, much of the trouble can be traced to a few sectors. Because they favor cheap stocks, many value funds have traditionally held big stakes in financial and energy companies, industries with low price-to-earnings ratios that have been clobbered lately. Big financial holdings hurt such premier value funds as Longleaf Partners(LLPFX Quote), which lost 46% in the past year. Other noted value funds that lost more than 45% include Columbia Value & Restructuring(UMBIX Quote), Dodge & Cox Stock(DODGX Quote) and Legg Mason Value(LMVTX Quote). ...