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Fund Spy: Morningstar Medalist Edition

Will Big Inflows Slow These Top Foreign Funds?

Popularity can be a burden.

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While the mutual fund landscape has changed in many ways over the years, one thing remains constant: Money chases the hot performers. But a hefty influx of investor dollars can hamper flexibility, a concern if a nimble asset base contributed to strong returns in the first place. Among actively managed equity funds that earn medals from Morningstar analysts, the three below have attracted the most cash, on a net basis, in the first nine months of 2014. (We excluded passive funds from the list as flows typically don’t have as much of an impact on them.) We took a closer look at each fund to determine whether their recent cash surges are likely to weigh them down. Coincidentally, all three happen to be foreign-stock funds.

 Dodge & Cox International Stock (DODFX)
YTD Inflows: $8.4 billion
This Gold-rated fund has excelled for much of its 13 years of operation, but it’s been on an especially strong run lately: It finished in the top quintile of its category in four of the past five calendar years. (It moved from foreign large value to foreign large blend in 2012.) And although it lost 2% in 2014 through Oct. 15, the fund tops more than 95% of peers over that period.

Greg Carlson has a position in the following securities mentioned above: DODFX. Find out about Morningstar’s editorial policies.