If you've been lusting to get into one of the best actively managed value mutual funds in the business, now is your chance! A lot of folks are staunch index-only investors, however, if you want to walk a little on the "wild side" and pick an actively managed fund, you won't find a more solid example than D&C Stock. It's been in the business since 1965, and its managers have an average tenure of almost 13 years. Dodge and Cox Stock's expense ratio is a mere 40% of the average for large value funds at 0.52% vs 1.30%. Since expenses cut into your returns, a smaller expense ratio gives you a leg up toward outperforming the competition.
While last year D&C Stock had an approximately 25% turnover ratio, the fund regularly has turnover ratios of <12%, indicating an average holding period of over 8 years. This means that the Stock Fund not only doesn't chase performance, it also makes it a good option in taxable accounts, where high turnover ratios have negative tax implications.
Past results are no prediction of future performance, they say, but the Stock Fund's trailing 20-year average return after expenses and fees is over two points higher than the S&P 500 index, with a Beta of .87 and an 3-year R-squared of 85. In plain English that means $48598.38 more in your pocket after 20 years on $10,000 invested, with less risk than an equivalent, no expenses index fund. Pretty remarkable.
Dodge and Cox Stock's investment in large, well established stocks makes this fund an ideal candidate to be included in your "core" investment strategy. Be aware though, that this fund does have a significant stake (nearly 20%) in foreign stocks, so if you do include it in your portfolio make sure that you don't end up with an oversized bid in foreign equities relative to your target weighting.
Name: Dodge and Cox Stock
Category: Large Value
Min Investment: $2500 [$1000 for IRA's]
Expense Ratio: 0.52%
Load: No Load
You can see the announcement for the fund's reopening, as well as the Balanced Fund here.
Full Disclosure: I currently own shares of DODGX and DODFX. I am not a financial advisor. Please read the fund prospectus and other information before making any investing decisions.
Data taken from dodgeandcox.com and morningstar.com