Thanks go out to reader Steve who asked: “Why do you love Dodge & Cox so much?”

Steve’s question came in response to my recent post titled "Dodge & Cox Balanced Fund: '05 Mid-year Review." You can also learn about my D&C International Fund...

My experience with fund companies is primarily limited to three organizations: Fidelity, Dodge & Cox and PIMCO. I also have brokerage accounts at Vanguard and Merrill, but do not own their funds.

Note: If you have a favorite fund or fund company, I encourage you to share it by adding your comments to this post.

10 REASONS WHY I LIKE MY DODGE & COX FUND:

1. Favorable Results, Coupled w/ Consistent Performance: Over the past 10 years, DODBX has produced an average annualized return of 12.33% -- BEATING THE S&P 500 BY 2.4% PER YEAR...

10-Year Return: Dodge & Cox Balanced Fund (Morningstar.com)

But here's the part I like best: Over the past 10 years, the fund has ONLY HAD ONE LOSING YEAR (see table below).

Dodge & Cox Balanced Annual Returns (Dodgeandcox.com)

2. Focus: Even though D&C is a sizeable company, they offer only 4 funds (only two remain open to new investors).

3. Management: Rather than having a single fund manager, they use a team of 9 members (Note: I believe that both Vanguard and Fidelity have also introduced funds using a team-management concept.)

4. Tenure: The management team's average tenure is 22 years.

5. Fund Style: They look for value and are then willing to buy and hold.

6. Low Key: I do not recall ever seeing an advertisement for D&C -- so they must rely on their reputation to attract clients.

7. Lack of Greed: They have attractive fees. And they close funds when the fund becomes too large (only two remain open to new investors).

8. Actively Managed: At least with D&C Balanced (which for me acts as a core fund), management has (some) discretion to move money between stocks, bonds and cash. Which gives fund managers (some) leeway to shift money in response to market opportunities / threats.

9. Respect: It is not unusual to see D&C's name mentioned in investment related articles / magazines. Everything I’ve seen has been positive.

10. Trust: I have a high level of trust and confidence in D&C -- that helps me sleep better at night!

Note: D&C Balanced is closed to new investors. D&C does however offer a new fund called D&C International Stock [DODFX], which gets top ratings for its category. As of this year, I am making regular investments in DODFX (read my ’05 mid-year review for this fund). I do not consider DODFX to be a core fund.

Disclosure: At this point in my life I’m a cautious investor. As such, my views may or may not be applicable to your investment needs. My portfolio also contains a high percentage of non-fund assets. I respect that your needs and tastes may differ.

about - portfolio - feedback - disclaimermortgage calculator