Dodge & Cox BalancedDODBX

Morningstar Rating

Fund Research and Analysis

by Dan Culloton

Patience is starting to pay off for Dodge & Cox Balanced investors.

It appeared that this fund couldn't do much right in 2007 and 2008. It was early in both the equity and fixed-income sides of the portfolio, upping its stake in financial stocks before the global financial system staggered to the brink of collapse and loading up on corporate bonds when the rest of the world fled to the relative safety of U. Read more

Kudos

Superior long-term returns.

Committed to rigorous fundamental research.

Exceptional veteran management team.

Low expense ratio.

Unwavering focus on the long term. Read more

Risks

Penchant for out-of-favor stocks can lead the fund to lag from time to time.

Asset base is still large.

The fund often owns both the stock and the bonds of the same company.

Shorter-than-average duration of the bond portfolio can hurt when rates fall.

Larger-than-average stake of corporate bonds in the fixed-income portfolio can sting when the bond market gets worried about the economy and defaults. Read more

Strategy

Management competes against a benchmark that is 60% S&P 500 Index and 40% Barclays Capital Aggregate Bond Index. But it has been known to take its equity allocation as high as 70%. It bases such moves on the relative valuations of the securities it owns and makes them slowly. Read more

Management

The fund's management team is deep, experienced, and talented. Its security selection and asset allocation are handled by the investment-policy committees that also run Dodge & Cox Stock and Dodge & Cox Income. The committee has more than 15 members with an average tenure of nearly 20 years with the firm. Read more

Inside Scoop

This fund has the same management and value-oriented approach as Dodge & Cox's stock- and bond-focused funds. Like those offerings, it has low expenses. Read more

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