Editor's note: This is part of a continuing series of articles looking at the 20 biggest no-load stock funds.
Dodge & Cox is so well known for its stock-picking prowess that people sometimes forget that the low-profile, San Francisco-based fund manager is also a dab hand at investing in bonds. Both skills are on display in Dodge & Cox Balanced, which borrows liberally from its two siblings, Dodge & Cox Stock and Dodge & Cox Income, a bond fund.
What you get with Balanced is a fund that has delivered outstanding returns with relatively low volatility. Over the past decade, the fund has returned 12% annualized, nearly five percentage points better than the average return of all balanced funds. In only one of those years did Balanced rank worse than 40% of funds in its category.
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Dodge & Cox has a fairly unorthodox way of researching and picking bonds. The same team of analysts studies both stocks and bonds. "If we have a very positive outlook for the long-term growth and success of a company, it makes us interested in buying the bond," says Charles Pohl, co-director of research.
Alas, Balanced is closed to new investors, but Dodge & Cox Income (DODIX), which remains open, is a fine choice for conservative bond investors. If you currently hold Balanced and like the allocation, feel free to BUY more.
Read about other D&C funds: Dodge & Cox Stock and Dodge & Cox International Stock.
To learn more about the fund firm, see The Dodge & Cox Mystique, an interview with two D&C veterans.
FUND FACTS
Dodge & Cox Balanced (DODBX)
Assets: $27.1 billion
Manager (year started): team (1977, for most experienced team member)
Returns (vs. S&P 500 Index)*
2006: 13.9% (15.8%)
Three years annualized: 11.2% (10.4%)
Five years annualized: 10.7% (6.2%)
Expense ratio: 0.53%
Portfolio turnover: 18%
Initial minimum investment: $2,500
Phone: 800-621-3979
Web site: www.dodgeandcox.com
*Returns through Dec. 31, 2006
Fund Fact sources: Standard & Poor's, Morningstar
View updated data for this fund and compare the performance of the 20 biggest no-load stock funds.
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