I have been asked recently by several readers and friends what is a good value mutual fund. These people know that value investing is the best way to invest but don’t have the time to research individual stocks. Instead of looking at many funds, and deciding which the best fund is, I decided to compile a chart and examine what would be the best fund.
There is no such thing as “the best fund”, and it is hard to compare different funds since they have different investment strategies even inside the value investing world. Right away I decided to focus on a core fund. I looked for funds that were either all cap or large cap funds. I excluded international funds and small cap funds since it is unfair and inaccurate comparison (hopefully I will be able to write an article on the best small cap or international funds in the future).
Below is a chart of 11 value funds that I believe are among the best funds out there. Some great funds might have intentionally or unintentionally been left out. I would prefer not to say which were intentionally left outm since I do not want to get political. However I must note that I could not include any of David Dreman’s current large cap funds since their record is too short, although they might be worth a look. He had the #1 fund for something like 20 years in a row I believe, so he definitely is a great money manager.
The criteria I looked at were funds that are value oriented. Many of these funds might define value investing differently but they all have their roots in value philosophy. I looked at funds that have at least a ten year track record. I think you need at least a ten year record to show you are capable of beating the market. These ten years were fantastic for evaluating a fund as they included two huge bear markets (a valuation bubble and credit bubble) and two bull markets 2003-2007, and the bull market from March 2009 until present. The S&P performance over the past ten years has been -0.81% per annum.
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In the next article I will dissect the 12 funds in the chart one by one.