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Portfolio > Economy & Markets > Stocks

Blending In Nicely

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Large-cap blend funds seek to combine the best of both worlds–growth-oriented stocks which provide high earnings growth, tempered by value-oriented issues which offer the stability of steadily-growing companies with predictable earnings streams.

Although value stocks have outperformed growth over the past few years, some observers believe growth is poised for a rebound. However, by investing in a blended fund, one can possibly ignore the eternal pendulum between growth and value.


One of the top large-cap blend performers, the $1.055-billion Jennison 20/20 Focus Fund (PTWZX) holds up to 20 growth stocks and up to 20 value stocks in the same portfolio. The fund is run by Spiros Segalas and David Kiefer.

As of June 30, 2006, Google (GOOG), 3.0%; Roche Holdings, 2.6%; UBS (UBS), 2.5%; Walt Disney (DIS), 2.4%; and Gilead Sciences (GILD), 2.4% comprised the fund’s top five growth holdings. The top five value stocks included TXU (TXU), 3.1%; Suncor Energy (SU), 3.1%; Comcast (CMCSA), 3.1%; Nexen (NXY), 3.1%; and Waste Management (WMI), 3.0%.

The portfolio is well diversified by sector. Information Technology makes up the largest portion of assets (21.1%), but then it is quite evenly divided, with Financials, Energy, Consumer Staples, Consumer Discretionary, and Industrials ranging between 11.9% and 10.7% of total assets.

Another recent outperformer in this arena, the $2.8-billion Thornburg Value Fund (TVIFX), invests in three types of companies: “Basic Value” (financially sound, well established companies trading at low valuations relative to net assets or potential earning power); “Consistent Earners” (consistent growth companies selling at valuations below historic norms); and “Emerging Franchises” (moderately-priced, but rapidly growing companies establishing a leading market position). Portfolio manager William Fries’s top holdings as of Sept. 30 included NII Holdings Inc. (NIHD), ExxonMobil Corp. (XOM) and Microsoft Corp. (MSFT).–Palash R. Ghosh



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