CGM FocusCGMFX

Morningstar Rating

Fund Research and Analysis

by Michael Herbst

Many investors in CGM Focus have not pocketed its highly touted gains.

As this fund posted eye-popping gains leading up to the market's meltdown in 2008, we cautioned investors about the risks of its strategy. Management's highly concentrated style often features large individual position sizes and portfolios of fewer than 25 stocks. Read more

Kudos

Manager Ken Heebner is experienced, long-tenured, and has delivered attractive long-term results.

Extremely flexible approach causes the fund to behave quite differently from indexes and peers.

Expenses are reasonable. Read more

Risks

This fund's concentrated portfolio makes for extraordinary volatility.

High volatility has led investors to buy and sell the fund at inopportune times.

Management's flexibility to short stocks adds an extra dose of risk.

Turnover here is incredibly high, which generates huge capital gains tax liability. Read more

Strategy

Manager Ken Heebner often invests in fewer than 25 stocks, and he trades furiously among stocks and sectors. He makes big sector bets relative to the typical large-blend fund, and he has changed the fund's market-cap emphasis based on where he sees opportunity. Read more

Management

Ken Heebner has been at the helm of this offering since its 1997 inception. He ran CGM Capital Development for 30 years before it was merged into this fund in 2008. He also runs CGM Mutual LOMMX and CGM Realty CGMRX. Before helping to start CGM in 1990, Heebner began his career as an economist in 1965 and put in time as a portfolio manager at Scudder, Stevens & Clark, and Loomis Sayles & Co. Read more

Inside Scoop

Manager Ken Heebner has built a great record here. Thanks to the fund's huge sector bets and ability to short, those who buy in should be prepared for huge swings in returns. Read more

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