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A Tale of Two Moats

How two funds met very different fates due to the quality of their holdings.

Mentioned: , , , , , , ,

 Schneider Value (SCMLX) and  Jensen Fund (JENSX) are among the best at executing distinctive strategies; they charge reasonable levies, come from seasoned boutique managers, and have earned our Analyst Pick designation. Both funds focus on large-cap stocks, differ from common benchmarks, and hold concentrated portfolios.

Yet that's where the similarities end. If you were to consider only the fund's Morningstar Style Box placement, Jensen in large growth and Schneider in large value, you might think Jensen is the riskier fund because it's willing to pay up for some growth. Yet reality tells a different story--witness the funds' performance in the last bear market and ensuing rally:

Cumulative ReturnsJensen (JENSX)Schneider Value (SCMLX)S&P 500Bear Market 10/9/07 to 3/9/09-45.30%-70.80%-54.90%Rebound 3/9/09 to 2/20/1190.20%148.10%104.40%

Karen Dolan has a position in the following securities mentioned above: PG, JNJ. Find out about Morningstar’s editorial policies.