Funds That Can Shine During Washington's Deadlock
To protect your portfolio, consider a steady mutual fund that focuses on high-quality stocks. Top choices include Becker Value Equity
While the emerging markets can be volatile, Harding Loevner delivers a smoother ride by focusing on companies that can thrive in harsh times. The portfolio managers look for stocks that can deliver above-average growth for long periods. Typical holdings have high returns on equity and little debt. During the past 10 years, the fund returned 13.1% annually, outdoing 82% of emerging markets funds, according to Morningstar.
In roaring bull markets, the high-quality strategy can lag as investors gravitate to riskier stocks. But the Harding Loevner fund has excelled in difficult markets. "Quality stocks generally outperform in downturns," says portfolio manager Rick Schmidt.
Schmidt looks for businesses that have secure niches. Such companies can grow, even in times when economies become sluggish. A favorite holding is 51job
Another holding is Copa Holdings
Becker Value aims to buy solid companies when they have fallen out of favor. Many holdings have above-average growth rates and below-average price-earnings multiples. During the past five years, the fund returned 15.7% annually, outdoing 69% of large value peers.
In 2009, the portfolio managers bought health insurers, including Aetna