Mutual Fund #4: FPA Crescent (FPACX)
Balance is a key component of a successful portfolio, making FPA Crescent (FPACX) a fund to consider. Manager Steve Romick has been in charge here since 1993 and offers investors a way to participate in the equity markets in a lower risk manner. Preservation of capital has always been a cornerstone of this fund — which has a wide mandate.
Romick can invest in practically any asset class and can even practice short-selling of stocks (betting on a decline in price). In practice, however this is done on a very limited basis. This $14.1 billion fund has evolved over time, and now emphasizes large-cap stocks for the equity portion of the fund. In the past, FPACX was unique for investing primarily in small- and midcap stocks for equity exposure.
Recently, just 51% of the fund was invested in the stock market—reflecting the lack of compelling valuations being uncovered of late. Nonetheless, the fund was up a remarkable 21.9% last year and remains a solid choice for conservative investors looking for equity exposure in a less risky package. Recent top holdings include: Microsoft, Oracle, AON (AON), CVS Caremark (CVS) and Thermo Fisher (TMO).
Over the past decade, the fund has advanced 8.6% on an annualized basis — good enough to rank in the top 2% of its Morningstar category. Mr. Romick and his team were recently nominated for 2013 U.S. Allocation Fund Manager of the Year by Morningstar in recognition for this solid performance. Fund expenses run 1.16%, or $116 for every $10,000 invested.