Buy the Unloved 2017
Leaning against flow and performance trends can be beneficial.
This article was originally published in the January 2017 issue of Morningstar FundInvestor. Download a complimentary copy of FundInvestor here.
For more than 20 years, Morningstar has recommended buying funds that others don't want as part of its "Buy the Unloved" strategy. This involves buying one fund from each of the three equity Morningstar Categories with the most calendar-year outflows and avoiding those with the most inflows. This contrarian approach asks you to put money to work in out-of-favor areas and to hang on for three to five years.
Dan Culloton does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.