Mid-Cap Value: Tops Over Ten Years

PIMCO PEA Renaissance Fund, the best-performing mid-cap value fund for the ten years, gained by seeking beaten-down stocks with catalysts, and from investing in all market capitalizations, according to Schneider. Despite that flexibility, he said the fund has focused on mid-cap value stocks for most of the past ten years. Schneider has managed the portfolio for the last five years.

Edward von der Linde, manager of Lord Abbett Mid Cap Value Fund/A (LAVLX), agrees that mid-cap stocks offer opportunities for value investors since “large companies that tend to blow up come down into the mid-cap range.” Von der Linde also feels value investors gain from a greater focus on balance sheet metrics than growth investors, who focus on stock price growth, he says. Von der Linde became lead manager of the fund in October, 1995, after joining its team in 1988.

Ariel Appreciation Fund (CAAPX) also emphasizes company fundamentals rather than stock movements, said Tim Fidler, director of research for Ariel Capital Management. “We tell our analysts to be business analysts, not stock analysts,” he said. A value offering, Ariel Appreciation Fund focuses on mid- and small-cap stocks. “We don’t believe the market inefficiencies we are seeking to exploit are in large companies,” Fidler said.

– Bill Gerdes, Daniela Valle