Dodge & Cox Reopens Funds

February 2, 2008

Apparently fund investors are sick and tired of all the scary recession talk and stock market volatility. In recent weeks many closed funds have reopened to new investors amidst a flight of old investors. The latest and perhaps greatest to announce the lock is off the door is Dodge & Cox funds. The value oriented firm will be reopening Dodge & Cox Stock (DODGX) and Balanced (DODBX) funds on Monday:

Dodge & Cox Funds, one of the most popular U.S. mutual fund families, said it will reopen to new investors its flagship Stock fund and its Balanced fund, which invests in stocks and bonds, after performance lagged its peers for the first time in more than a decade.

The $63 billion asset Stock fund and $27.1 billion balanced fund will reopen on Monday. Dodge & Cox had in 2004 stopped accepting money from new investors after assets in the funds had grown too rapidly for it to invest easily. It continued to accept money from existing investors."

Dodge & Cox is losing investors for an unusual reason for this top-performing family, underperformance:

In a statement on Friday, Dodge & Cox said investors have recently been redeeming money from the funds because of weak returns and volatile markets....the Stock fund last year returned 0.1 percent, trailing 61 percent of its 'large-value' peers, while the Balanced fund returned 1.7 percent, lagging 89 percent of its 'moderate allocation' peers. Both funds had outperformed a majority of their peers in every year over the previous decade..."

Investors still love Dodge & Cox International Stock (DODFX) - a good sign this fund and international funds in general will underperform U.S. stock markets going forward.