The three core funds recommended above only scratch the surface of what’s out there. Another noteworthy Large-Cap fund is Clipper Fund (CFIMX), a long-term champion but short-term underperformer. We don’t advise buying it now, for two reasons. First, it recently upped its investment minimum to $25,000, which may be prohibitive to many investors. Second, we’re not enamored of the fund’s largest holdings—Freddie Mac and Fannie Mae, which together account for more than 12 percent of the portfolio.
But that doesn’t mean we can’t benefit from the experience and astute value sense of Clipper’s managers by scanning their holdings list. According to their June 2003 mandatory holdings update report, their only significant new position has been HCA, the largest for-profit hospital chain in the country.
First, the caveats. HCA has had its share of problems recently. In addition to some legal problems of its own, the stock crashed when its peer Tenet Healthcare was under SEC investigation. The weak economy and rising unemployment also have hurt HCA along with all hospital operators.
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