Companies in the Barrow All-Cap Core Fund are merger targets four times more than the market at large and that's because the fund's managers take a private equity approach to stock-picking, says David Bechtel, principal at Barrow Funds. Bechtel says the fund has 20% of its assets in health care stocks presently with Questcor being its weightiest position. The value-based fund also looks for a heavy margin of safety when selecting stocks, which has led it to invest in Smith & Wesson and Raytheon.

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