Amazingly, only three mid-cap value funds made our cut and the same pair of managers runs two of them.
All you can say is that either these are just great funds, or the category itself is underwhelming. No matter how you feel about the slim pickings, let's check out this trio and then look at two other solid choices that just missed making our list.
First on our list is the broker-sold
Lord Abbett Mid-Cap Value fund, where veteran Ed von der Linde has been lead portfolio manager since its 1983 launch. He and his colleagues screen small- and mid-cap stocks, looking for those with consistently solid earnings growth. They then hold 50 to 60 stocks in which they see a reasonable valuation and at least two company- or industry-specific catalysts for higher growth. While that approach has led to both good and bad years, the fund beats more than 70% of its peers, as well as the
, over the past one, three, five and 10 years, according to Morningstar.
The other two funds on our list,
Equity Income and
Value funds, are both run by Phil Davidson and Scott Moore.
Davidson has run the Value fund since its 1993 inception, with Moore coming on board in 1999. The duo take a traditional tack, building a broad portfolio of stocks in different sectors that are cheaper than their peers according to traditional metrics. Their approach is tweaked only slightly for the Equity Income fund, which launched with Davidson at the helm in 1994 and gained Moore as a co-manager in 1999. On that fund, as you might expect given its name, the two focus a bit more on dividend-paying stocks and convertible bonds to boost the fund's yield.
Both funds have outpaced their average peer in six of the past seven calendar years and have beaten the S&P 500 over the past one, three and five years.
Two names you might have expected to see on this list also deserve mention: Bill Nygren, manager of the no-load
Oakmark fund, and Robert Olstein, who runs the broker-sold
Olstein Financial Alert fund.
Nygren made his name by shooting the lights out with the concentrated
Oakmark Select fund, which has trounced more than 75% of its peers each year since the fund's 1996 start. Those results helped Nygren
win Morningstar's domestic stock fund manager of the year award for 2001. The more diversified Oakmark fund missed our cut because Nygren's run it only since March 2000.
Olstein, a balance sheet fiend, scours the market for companies trading for less than he thinks they're worth, and that also haven't cooked their books with bizarre accounting. His fund tops the S&P 500 and at least 60% of his peers over the past one, three and five years. Why didn't he make the cut? His fund's annual expenses are 2.20%, well above the category's 1.42% average.
For more details on each manager's style, check out these recent interviews with
Click on these links to check out the other funds we dug up:
Large-cap value funds
Small-cap value funds