FPA New IncomeFPNIX

Morningstar Rating

Fund Research and Analysis

by Christopher Davis

FPA New Income is a worthy safe haven, but its cautiousness comes with a price.

One principle more than any other animates managers Bob Rodriguez and Tom Atteberry: Don't lose money. And they will go to great lengths to stay out of harm's way. In the Read more

Kudos

Strong long-term return earned with very low risk.

Hasn't posted a calendar-year loss during the lead manager's tenure, which stretches back to 1984.

The fund will have a new lead manager in 2010, but he's very experienced and will employ the same strategy.

Expenses below the norm for its no-load peer group.

Richly insightful shareholder reports. Read more

Risks

Lead manager Bob Rodriguez will take a year sabbatical in 2010, returning as comanager in 2011.

Huge, if shrinking, cash stake means the fund doesn't benefit as much from a bond-market rally.

The fund's very low-duration and nearly all AAA rated portfolio limits volatility, but it will also hurt when investors are willing to take bigger risks.

Fund's contrarian streak doesn't always result in broad bond-market diversification. Read more

Strategy

Unlike many of its intermediate-term bond peers, this fund doesn't pay attention to a broad market index. Instead, management seeks the best values, regardless of sector. That leaves the fund looking Read more

Management

Management is seasoned and highly decorated. Bob Rodriguez was named Morningstar Fixed-Income Manager of the Year for 2001 and 2008. Comanager Tom Atteberry was also named for top honors in 2008. Rodriguez, who has been at the helm since 1984, will Read more

Inside Scoop

With a true contrarian approach, this fund delves into the less frequently traveled corners of the bond market. Capital preservation is job one for management. An against-the-grain Read more

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