3 / 5 Stars
2 2 5 4 3
Zacks Investment Research
Standard & Poor's
4 / 5 Stars
#125 in Large Growth
U.S. News evaluated 464 Large Growth Funds. Our list highlights the top-rated funds for long-term investors based on the ratings of leading fund industry researchers.
The fund has returned 21.07 percent over the past year, 15.06 percent over the past three years, 16.10 percent over the past five years, and 6.43 percent over the past decade.
|Trailing Returns||Updated 06.30.2014|
|Year to date||6.2%|
|3 Years (Annualized)||15.1%|
|5 Years (Annualized)||16.1%|
|10 Years (Annualized)||6.4%|
The Madison Mosaic Investors Fund is pretty typical of most large-cap growth funds. It invests in primarily U.S. blue-chip stocks— successful corporations with nationally-known brands—and tends to hold them for long-term appreciation. What’s less typical is its compact portfolio and noticeable attraction to cash-heavy market leaders.
As of July 03, 2014, the fund has assets totaling almost $209.43 million invested in 35 different holdings. Its portfolio consists of about 85 percent U.S. blue-chip stocks with most of the remainder in stocks of large foreign companies.
This fund seeks long-term appreciation. While it does have sizable stakes in more expensive and well-known stocks, like Google and French oil company Schlumberger, its new position in U.S. Bancorp demonstrates management’s belief in growth-at-a-reasonable-price investing, or GARP. The fund has returned 21.07 percent over the past year and 15.06 percent over the past three years.
“Participate and protect. That’s our slogan,” says Larry Tabak, vice president of Madison Mosaic Funds. “We are working to participate in up markets, and we also have an interest in protecting in down markets.” The fund’s focus on cash-rich companies helps protect it in bear markets, because these companies have more than enough savings to withstand a few bad quarters. This helped the fund beat its large-cap growth peers in the 2008 tumult by more than 7 percentage points. The fund has returned 16.10 percent over the past five years and 6.43 percent over the past decade.
Management chooses a short-term holding strategy, keeping the average position for about a year and a half. The fund’s portfolio is concentrated, which heightens its volatility compared with the S&P 500. Management considers a company’s fundamentals before it makes any decision based on the overall macroeconomic front. Cheap stocks are the secondary criterion after earnings and stability. “We might be in healthcare, not because we think a Republican Congress will overturn the healthcare legislation, but because that sector has gotten beaten up, and it’s pretty cheap,” says Tabak.
Role in Portfolio
Morningstar says, “This fund’s blue-chip-heavy portfolio makes it a suitable core offering.”
Management at this fund is differentiated by its long tenure. Since its inception in 1978, the fund has had just six portfolio managers. Currently, they are Jay Sekelsky, a co-manager since 1990, and David Halford, who became a senior portfolio manager April 2010.
Madison Investors Fund has an expense ratio of 0.89 percent.
A smaller portfolio can make the fund more susceptible to heavier volatility. It will mostly likely lag in markets in which small-cap stocks and “pricier growth stocks” dominate, says Morningstar.