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I am confused. I repeatly read that Dodge & Cox Balanced(DODBX) is the fund to own for the long term and indeed I do own this fund. However I find that Oakmark Equity & Income I (OAKBX), which I also own, has outperformed the Dodge & Cox fund over the last 1, 3, and 5 years according to Fund Alarm (www.fundalarm.com). and this includes the year to date data.

Also according to Kiplinger the Oakmark fund has performed better.

What am I missing.

Duan

Well, you just said the reason why OAKBX over DODBX and throw in D&C has just gotten too big vs It's investing limitations and thus has to put all the extra $ in Underperforming stocks and thus ends up now being not much better than a comparable index port.

I expect OAKBX will sucumb to the same in yrs ahead..

and that's one of the pitfalls of owning AMF's.. Active Managed Funds... They don't last forever... just look at Sequoia and Magellon as examples..

Happiness is a Back up...Always have a 2nd/smaller asset  Fund to jump into when your Primary one gets to big ...etc..

Duan,

You aren't missing anything. Even the best managed funds have significant fluctuations in performance from year to year.

Take a look at this Yahoo comparison chart of the two funds over 5 years and you'll see that they were neck and neck until early 2007.

http://finance.yahoo.com/q/bc?s=DODBX&t=5y&l=on&z=m&q=l&c=oakbx 

That's when Dodge and Cox Balanced went into a swoon, performing in the bottom quartile.

Will it recover? I think so. D&C is a value oriented shop and value stocks, which include a lot of bank stocks, have been hard hit in the last year. Go back 10 years and you'll find that both funds were in the top 5 percent of moderate allocation funds.

Scott

Thanks Scott.

Duan