As I write, the performance of our Champion Funds service is at its peak. Each of the newsletter's recommended funds has made money for shareholders, and our Champs are collectively beating the market to the tune of nearly 8%. And did I mention that that outperformance has come amid far less volatility than you'd get with a portfolio of individual stocks? It's all true.
Our model portfolios -- i.e., cherry-picked collections of funds that come in Aggressive, Moderate, and Conservative flavors -- are beating their benchmarks, too. So what else could a serious long-term investor want, I ask you?
Well, how 'bout more of the same? Not coincidentally, that's exactly what we aim to deliver with Champion Funds. Indeed, while I'm certainly pleased by our performance thus far, I won't be satisfied until we've beaten the market over the next three to five years and -- as Buzz Lightyear might say -- to infinity and beyond!
Masterful money managers
I'm entirely confident that we'll get that job done, too.
The funds that qualify for Championship status, after all, are run by the world's best stock pickers, folks who have delivered the goods and then some for their shareholders over the long haul. They generally eat plenty of their own cooking -- i.e., they invest their own moola in the funds they manage -- which means that when you invest with them, their interests are clearly aligned with yours.
As much as I love to crunch mutual fund statistics, few data points can tell you more than that one.
And speaking of data points, it should come as no surprise that the cost of owning a portfolio of Champs is exceedingly reasonable. Our Aggressive model, for example, will ding you just 0.74% per year, while the Moderate and Conservative editions cost a mere 0.67% and 0.52%, respectively. Compare that with your brokerage bills and call me in the morning.
But let's cut to the chase, shall we? They say a picture is worth a thousand words, and if I'm doing the math right, a chart has to be worth at least 250. So I'll stop typing long enough to crunch the historical data from Morningstar and show you the Championship profile in tabular form. Ready? OK.
|
Domestic Stock |
Champion Funds |
|
|---|---|---|
|
Manager Tenure |
4.5 yrs |
9.5 yrs |
|
Expense Ratio |
1.45% |
0.95% |
|
12b-1 Fee |
0.41% |
0.01% |
|
+/- S&P (3 yrs.) |
1.78% |
5.33% |
|
+/- S&P (5 yrs.) |
2.82% |
11.07% |
|
Turnover |
96% |
51% |
The right profile
So just how do you go about uncovering funds that, taken collectively, add up to a profile like that? Good question. Here's the good answer: Focus like a laser beam on salient fund data in the same way that stock jocks comb through company financials. And then -- because the goal isn't just to look backward but to find tomorrow's winners today -- you compare that data with the manager's stock-picking strategy and gauge how (and in which kinds of markets) it has fared over time.
That, of course, is precisely my job as your friendly neighborhood fund analyst, and one of my favorite tasks in that role involves tracking the changes that occur in our Champs' portfolios. What better way to get a bead on a fund manager's thinking?
For example, the leader of one of our picks -- a fund that has beaten the market by more than 15% since its recommendation, by the way -- recently harvested gains in oil titan Chesapeake Energy
Again, these are funds whose managers have solid track records of success, and with that in mind, I'd argue that Champion Funds has value even for those who consider themselves stock jocks. That is, when the managers at our Champs opt to buy or sell, it just might be a good idea for you to consider buying or selling as well.
Beyond that, with more than 90 million Americans invested in mutual funds, I suspect that, in addition to stocks, most of you own funds, too. So why not make the most of that portion of your investment portfolio? Champion Funds is designed to help you do just that. And so far, so good.
Shannon Zimmerman is the lead analyst for Champion Funds and doesn't own any of the securities mentioned. You can try his newsletter free for 30 days. The Fool has a strict disclosure policy.
