The Best Investments for the Next Decade: Fuller & Thaler Behavioral Small Cap Equity Fund (FTHNX)
Behavioral finance has become a big deal in recent years, and that has led to the creation of funds such as the Fuller & Thaler Behavioral Small Cap Equity Fund (MUTF:FTHNX), which got its inception in September 2011.
Back in March, I suggested FTHNX is one of 10 mutual funds you could buy and hold forever. As far as I’m concerned, the next 10-year period qualifies.
This fund looks to buy a combination of small-, mid- and micro-cap stocks, and it earns five stars from Morningstar, which means it has outperformed most of its competition over the past three, five and 10 years. The fund charges 1.07% annually and tries to keep turnover to less than 100% to keep down costs. A $10,000 investment at inception is today worth approximately $24,000, well ahead of its benchmark and the S&P 500.
Investing in companies where investors have overreacted to bad news or under-reacted to the good news has led to superior performance. Given that investors consistently overreact to news of any kind, FTHNX should continue to do well in the coming years.