Welcome, Fools, to part 39 of our several-thousand-part series, "Better Know a Stock Picker," which is loosely -- but not too loosely -- based on Stephen Colbert's "Better Know a District" from The Colbert Report.
Like Stephen and his thorough investigations into America's congressional districts, each week, I take a look at a fund you may want to own. What's on tap this week?
|
American Century Vista (TWCVX) | |
|---|---|
|
Expense ratio |
1% |
|
Fund size |
$3.5 billion |
|
One-year return |
5.75% |
|
Five-year return |
10.54% |
|
10-year return |
9.65% |
Top 5 holdings
|
Company |
% of Assets |
|---|---|
|
NII Holdings (NASDAQ:NIHD) |
6.05% |
|
Precision Castparts (NYSE:PCP) |
4.90% |
|
Leap Wireless (NASDAQ:LEAP) |
3.83% |
|
Thermo Fisher Scientific (NYSE:TMO) |
3.72% |
|
BE Aerospace (NASDAQ:BEAV) |
3.66% |
Meet Glenn Fogle
The fightin' team at American Century Vista is led by Glenn Fogle, who has run this mid-cap growth fund since September 1990. Fogle was recently named to Standard & Poor's list of the best fund managers.
Color me unsurprised. Fogle has been a long-term winner, guiding Vista to market-beating results over both the trailing five- and 10-year periods. And he's achieved that while running the hamster wheel: Vista sports 234% annual turnover. Why does Fogle continue to win? Gravitas. He'll stick to his go-go-growth strategy, even when all others have run screaming from the market.
For example, in 1997, when American Century 20th Century Giftrust, another of his funds, took a beating, Fogle remained steadfast. In an interview with BusinessWeek at the time, he said, "The worst thing to do is to change the character of your fund."
Giftrust has since suffered a losing streak to the S&P, but if Fogle's stock-picking record is any indication, that's an aberration. Rewind to July 2003, and you'll see what I mean. Back then, he told MarketWatch that Coventry Health's (NYSE:CVH) pricing power would result in higher earnings, creating market-beating returns. The stock has risen roughly 160% since.
How he invests
A superstantial sense for good investments helps Fogle stick it to Wall Street's stockinistas. More practically, that translates into betting on small-to-mid-sized firms that are growing earnings and revenue at an accelerated pace.
One example is NII Holdings, which is expanding rapidly by serving mobile phone customers here and in Latin America. Analysts forecast five years of 38.5% average annual growth for NII. Compared with an average P/E of 32.5, that results in a reasonable 0.85 PEG. Eat that, Wall Street.
Is this fund for you?
Could Fogle be the next Peter Lynch? Motley Fool Champion Funds advisor Shannon Zimmerman has already bestowed that honor on T. Rowe Price New Horizons manager John Laporte; like Fogle, Laporte huge interests in NII. That's a good sign.
Better still is the fund's cheapness factor. Vista sports no loads and charges just 1% in annual expenses. That's within spitting distance of championship territory, and it makes me wonder whether Shannon will one day add Vista to his market-thumping portfolio. (Another American Century choice -- a value fund -- made the cut in June 2005, and it's beating its benchmark by more than 20 percentage points since. Want details? Click here to get 30 days of free access to Champion Funds.)
That's today's profile. See you back here next week, fund nation. Good night.
For more Foolish coverage of the growth stock gurus:
- Go for global growth with G. Paul Matthews.
- Throw Fido a bone and check out Will Danoff's Fidelity Contrafund.
- T. Rowe Price's Bob Smith says that betting on growth needn't be risky.
Think you can't beat the market with funds? Think again! The selections in Shannon Zimmerman's Motley Fool Champion Funds portfolio are up an average of 33%, vs. just 19% for their comparable benchmarks. Ask us for an all-access pass, free for 30 days, to get an unfettered look at all of Shannon's picks, manager interviews, and model portfolios.
Fool contributor Tim Beyers, ranked 865 out of more than 25,500 in our Motley Fool CAPS investor intelligence database, is a regular viewer of The Colbert Report. (Stay the course.) Tim didn't own shares in any of the companies mentioned in this article at the time of publication. All of his portfolio holdings can be found at Tim's Fool profile. His thoughts on mutual funds, Foolishness, and investing in general may be found in his blog. Coventry Health is a Stock Advisor pick. T. Rowe Price New Horizons is a Champion Funds recommendation. The Motley Fool's disclosure policy is always championship caliber.
