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Fund Spy: Morningstar Medalist Edition

The Most Concentrated Stock Funds We Rate

A look at the dispersion of Analyst Ratings for some of the most focused equity funds in Morningstar's coverage universe.

Dan Culloton
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Be careful for what you ask for when looking for a concentrated equity fund--you might get exactly what you want. Funds that limit their holdings to those in which their managers have the highest conviction offer the promise of bigger returns, but also the risk of having too much in a particular stock or group of stocks at the wrong time. Morningstar analysts weigh these opportunities and pitfalls when rating funds run by high-conviction managers.

Here's a look at how the Morningstar Analyst Ratings shake out for the most focused of our rated funds, which for this article are defined as those with fewer than 30 holdings, significantly more money in their top holdings than their respective Morningstar Category average, and more than a third of their assets in at least one sector.

Dan Culloton has a position in the following securities mentioned above: CFIMX. Find out about Morningstar’s editorial policies.

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