Davis Opportunity Fund

Scorecard
4 / 5 Stars
Lipper
5 5 5 4 4
Zacks Investment Research
2 (Buy)
Standard & Poor's
5 / 5 Stars
TheStreet.com
A+ (Buy)

U.S. News evaluated 466 Large Growth Funds. Our list highlights the top-rated funds for long-term investors based on the ratings of leading fund industry researchers.

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Note: Profile written for different share class.

Performance

The fund has returned 36.74 percent over the past year, 17.04 percent over the past three years, 25.11 percent over the past five years, and 7.39 percent over the past decade. 

Trailing Returns Updated 02.28.2014
Year to date 5.9%
1 Year 36.7%
3 Years (Annualized) 17.0%
5 Years (Annualized) 25.1%
10 Years (Annualized) 7.4%

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Summary

Davis Opportunity hasn't found many good opportunities lately.

As of March 05, 2014, the fund has assets totaling almost $558.29 million invested in 68 different holdings. Its portfolio consists primarily of shares of large and mid-sized companies.

So far, 2011 has been a rough year for the fund. As of the end of June, its year-to-date returns trailed those of the broader market by 2.6 percentage points. The fund's outsized position in Sino-Forest Corporation has been particularly devastating. The company, which is based in Canada and operates commercial forest plantations in China, was down 86 percent year-to-date as of the end of June after short sellers raised concerns over the true extent of its timber holdings. Like Sino-Forest, a number of this fund's holdings are based outside of the United States. As of the end of the first quarter, foreign companies accounted for a fifth of the fund's assets. The fund's largest sector allocation is to technology companies, although the fund is still underweight to tech companies when compared to its peers in Morningstar's large growth category. Google and Texas Instruments are, as of the end of the first quarter, among its favorite tech names. The fund has returned 36.74 percent over the past year and 17.04 percent over the past three years. 

Over the past several years, this fund has rarely experienced breakout performance. Indeed, in any given year, it tends to stay near the middle-and sometimes the bottom-of the pack. For that matter, its trailing five-year returns land it, as of the end of June, in the bottom 6 percent of its Morningstar category. Nonetheless, its relative steadiness has generated very respectable longer-term numbers. Meanwhile, its low turnover ratio has helped with tax efficiency. The fund has returned 25.11 percent over the past five years and 7.39 percent over the past decade. 

Investment Strategy

According to the fund's prospectus: "Davis Advisors manages equity funds using the Davis Investment Discipline. Davis Advisors conducts extensive research to try to identify businesses that possess characteristics that Davis Advisors believes foster the creation of long-term value, such as proven management, a durable franchise and business model, and sustainable competitive advantages. Davis Advisors aims to invest in such businesses when they are trading at discounts to their intrinsic worth. Davis Advisors emphasizes individual stock selection and believes that the ability to evaluate management is critical. Davis Advisors routinely visits managers at their places of business in order to gain insight into the relative value of different businesses. Such research, however rigorous, involves predictions and forecasts that are inherently uncertain."

Role in Portfolio

This fund could lend support to a well-balanced portfolio.

Management

A team of five managers runs the fund.

Fees

Davis Opportunity Fund has an expense ratio of 0.77 percent. 

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Risk

Like all stock funds, this one comes with some risks.

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See Also:

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