Star Gazing: Washington Mutual Investors Rises
Value rally rewards an old stalwart's conservative convictions.
One of the more conservative mutual funds in the business picked up a star in Morningstar's rating system last month as the market finally came back around to its way of thinking. Meanwhile, a couple of more aggressive offerings benefited from age and good timing, while other go-go growth funds weren't so lucky.
Value-investing stalwart Washington Mutual Investors (AWSHX) suffered outflows in 2000 in the wake of its 1999 showing, when it trailed the S&P 500 by more than 20 percentage points. Recently, however, the market has rewarded the fund--and investors who haven't fled--for adhering to its strict convictions, which include limiting itself to the stocks of companies that have paid dividends in nine of the last 10 years and that do not deal in alcohol or tobacco. Washington Mutual Investors gained more than 9% last year, enough to outpace most of its large value peers and the S&P 500.
Dan Culloton does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.