3 Upgraded Funds We Really Like

Russel Kinnel: We’re always keeping tabs on funds we cover for fundamental shifts that suggest we should consider changing a fund’s rating. For upgrades, it’s usually the accumulation of many things such as stable management, proof of investment concept, and gradually building up competitive advantages. Today, I’ll share three fresh upgrades.

3 Upgraded Funds We Really Like

1. Oakmark International Small Cap OAKEX
2. T. Rowe Price U.S. Large-Cap Core TRULX
3. Fidelity Capital Appreciation FDCAX

We raised Oakmark International Small Cap from Silver to Gold. Foreign small-cap funds are a quirky bunch that tend to have uneven performance. Yet, within that group, this fund stands out as one of the best. We raised the fund’s People rating to High to match the Process rating.

Longtime manager David Herro is still listed as a manager, but he has gradually handed more responsibility to Michael Manelli and Justin Hance. We’ve been impressed by their work in building a fairly focused portfolio of appealing value stocks. They have long favored industrial stocks that are well-run businesses. Lately, the fund has beaten its benchmark and peers but in rather volatile fashion.

We raised T. Rowe Price U.S. Large-Cap Core’s People rating to Above Average, and that took the overall rating from Neutral to Bronze. Manager Shawn Driscoll just passed the two-year mark on this fund, but he had a longer and good track record at T. Rowe Price New Era. Driscoll’s emphasis on high-quality companies trading at modest multiples gives the fund a nice defensive side as evidenced by its smaller loss in 2022.

We recently raised Fidelity Capital Appreciation’s Process rating to Above Average, and that raised the overall rating to Silver. The fund is run by two equal comanagers, Jason Weiner and Asher Anolic. That’s a rather unusual setup at Fidelity, but it’s worked nicely here. They begin with the excellent research done by Fidelity analysts and then add their own mental models to better understand companies. The fund is a middle-of-the-road growth fund that’s beaten peers over the managers’ tenure, but it has actually lagged the Russell 1000 Growth.

Watch 2 Great Large-Cap ETFs for more from Russel Kinnel.