Don't Get Swept Up in the Wave of Rookie Value Funds

Value investing has gone from the doghouse to the penthouse, so brace yourself for a geyser of value fare, even though plenty of solid offerings already exist.

Other Junk

How to Build a Diversified Fund Portfolio

Value Veteran Bill Miller Buying Tech and Telecom Stocks

Did Magellan's Stansky Make a Titanic and Wrong Call on Tech?

Without a Net: The Perilous State of Net Funds

Over the past few years, value funds, whose price-conscious strategies typically lead to tech-light portfolios, lagged behind tech and more aggressive growth funds that tend to make big bets on that mercurial sector. In a familiar pattern, investor dollars flocked to tech and tech-stuffed growth funds and fund companies slapped growth funds together as fast as they could -- less than a third of the tech funds out there have a three-year record.

But in the wake of the tech sector's collapse, the average small-, mid- and large-cap value funds are up 25.5%, 18.5% and 6.9%, respectively, over the past 12 months, according to Chicago fund-tracker Morningstar. Their growth counterparts and the S&P 500 are underwater over the same period. Fund investors' net cash flows to big-cap value funds through the end of April total some $13 billion, compared with a $3 billion net outflow for big-cap growth funds, according to Boston fund consultancy Financial Research Corp. ...