New funds worth a look

One Morningstar analyst looks at funds that are slightly expensive but poised for growth.

By Kim Peterson Dec 28, 2010 4:20PM
Simple stock picking tips © CorbisOver at Morningstar, Russel Kinnel says he has found nine promising new funds managed by experienced investors who have strong track records.

But being new funds, they don't have the attractive expense ratios you'd find at older ones. The hope is to get in on these now, and asset growth would drive costs down.

If you're willing to accept that negative, then here are the nine funds that Kinnel likes:

DoubleLine Total Return Bond (DBLTX), with an expense ratio of 0.49%. This fund is being managed by someone with a "remarkable stretch of uncanny returns," Kinnel writes. This fund traded at $11.04 Tuesday. Post continues after video:
Pimco EqS Pathfinder
(PTHDX)
, with an expense ratio of 1.24%. The managers have a cautious approach, which Kinnel likes, but he says they have moved into cash so much that the fund won't see a big pop when stocks rally. This fund traded at $10.18 Tuesday.

Vanguard Explorer Value (VEVFX), with an expense ratio of 0.59%. This is a small-cap fund with a value tilt, and uses the Russel 2500 Value Index as its benchmark, Kinnel writes. Small caps get a lot of positive buzz right now, so this one is worth a look if you want to get into that area. This fund traded at $23.18 Tuesday.

Evermore Global Value (EVGBX), with an expense ratio of 1.6%. A promising fund, but the expenses are a little high, Kinnel says. This fund traded at $10.44 Tuesday.

Fairholme Focused Income (FOCIX), with an expense ratio of 0.50%. Kinnel describes it as a pretty conservative corporate-bond fund with a lot of short-term debt (read: cash). Probably not the best fund for big returns. This fund traded at $10.91 Tuesday.

Jensen Value (JNVSX), with an expense ratio of 1.25%. The fund's strategy is to look at high-quality companies with a track record of at least a 15% return on equity. Then, it focuses on the companies with the lowest valuations. This fund traded at $10.25 Tuesday.

Hartford International Value (HILAX)
, with an expense ratio of 1.4%. If the well-performing Hartford International Opportunities (IHOAX) is any indication, this one should perform nicely. HILAX traded at $11.94 Tuesday.

Artisan Global Equity (ARTHX), with an expense ratio of 1.5%. Kinnel says the strategy may be to find secular growth stories trading at decent prices. This fund traded at $11.22 Tuesday.

AQR Risk Parity Fund (AQRIX)
, with an expense ratio of 1.2%. In this case, risk parity means to keep these four risks equal: equity, interest rate, inflation and credit. The fun will adjust exposure to asset classes based on market volatility, Kinnel says. This fund traded at $10.16 Tuesday.

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