Skip to Content
Our Picks

Top-Performing Funds with Low Profiles

Use this screen to find some great funds you've probably never heard of.

Mentioned: , , , , , , , , ,

While offerings from prominent fund companies benefit from large marketing machines and hordes of salesmen charged with gathering assets, funds from smaller shops that quietly outperform over the long haul are more easily overlooked. We used the Premium Screener to help turn up some of these lesser-known gems.

To start, we zeroed in on large- and mid-cap domestic-equity funds that are open to new investments of $10,000 or less that also sport reasonable price tags. To get at more-nimble funds, we narrowed the results to funds with total asset bases of $500 million or less. We wanted to choose funds that held up well in both the short- and long-term, so we limited the results to funds that have landed in their categories' top third for the trailing year through May 1, 2009, as well as over the past 10 years. Of course, we also made sure that the current management team was responsible for the funds' strong records.

The screen returned the following funds as of May 1, 2009:

 FPA Perennial (FPPFX)
 GE Premier Growth Equity (GEPCX)
 Homestead Value (HOVLX)
 Madison Mosaic Mid-Cap (GTSGX)
 Matrix Advisors Value (MAVFX)
 Sextant Growth (SSGFX)
 Tocqueville (TOCQX)
 Weitz Partners Value (WPVLX)
 Westport (WPFRX)
 Yacktman (YACKX)

While underfollowed, we think Madison Mosaic Mid-Cap has a lot of appeal. One of five equity funds offered by Mosaic Funds, the fund's longtime managers Richard Eisinger and Jay Sekelsky run a fairly concentrated portfolio of around 35 holdings. In their quest to find mid-cap stocks that they can hang on to for several years, they use a discounted cash-flow model and put a premium on firms with managers who deftly deploy cash. Their strategy has generally kept them from treading heavily in cyclical fare including energy and materials stocks. This helped the fund hold up better than most peers in 2008 as these stocks were hit hard in the downturn. The fund's fate isn't completely tied to cyclicals, however. In 2006 and 2007, when those stocks last rallied, the fund also generated peer-beating returns thanks to strong stock selection in other sectors. While the fund hasn't grown much larger than $150 million in assets over the past 10 years, we certainly think that it deserves more attention.

Another underappreciated mid-cap fund is Sextant Growth. Nick Kaiser has managed the fund since its 1989 inception, and he also runs this fund's larger large-cap sibling:  Amana Trust Growth (AMAGX). For both funds, Kaiser gravitates toward stocks with good growth potential, but for his large-cap charge he invests according to Islamic law. This prohibits investments in firms that derive a significant amount of revenue from alcohol, tobacco, gambling, or borrowing or lending money, for example. Here, he doesn't have those restrictions and can therefore invest in financial firms, as well as those with more debt. Kaiser's multiyear investment horizon and strong stock-picking skills have resulted in solid performance for both funds. That said, Sextant Growth hasn't gotten nearly as much attention as its older sibling.

Westport comes from a two-fund-offering shop. Seasoned manager Ed Nicklin runs the show at this mid-cap blend fund, which had a total asset base of around $140 million as of April 2009. Although the majority of the portfolio's holdings fall into the mid-cap range, Nicklin picks stocks from up and down the market-cap ladder as long as they are trading cheaply relative to his estimates of their future cash flows and long-term growth prospects. Nicklin has a multiyear investment horizon, and he gets to know the portfolio's roughly 40 holdings well. He's also willing to hold larger cash stakes--the fund had roughly 20% in dry power at the end of 2008--which saved the fund some pain during last year's sell-off. While such a large cash stake is risky in the event of a broad market rally, Nicklin historically has weathered such events well and the fund has posted solid returns (on a relative and absolute basis) in a variety of market conditions. We think investors should take note of this fund.

Don't have a Premium Membership? You can still use our Premium Fund Screener by taking a free, 14-day trial.

Karin Anderson does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.