Vanguard Windsor is solid but streaky

Fund managers now often take large positions in individual stocks or sectors

Your Money

October 30, 2005|By ANDREW LECKEY | ANDREW LECKEY,TRIBUNE MEDIA SERVICES

I own shares of Van- guard Windsor Fund in my retirement account. What do you think of this investment?

- H.S., via the Internet

In existence since 1958, this fund was once the nation's largest and the domain of famous contrarian John Neff.

In recent years it has been a bit streaky because its new managers often take large positions in individual stocks and sectors.

Returns were hurt by an untimely jump into telecommunications stocks, avoidance of energy stocks and disappointing technology investments.

But if you're willing to accept some degree of inconsistency, it is a solid fund with low expenses and a dedication to finding down-and-out stocks with strong potential. It also held up well in the bear market.

The $21 billion Vanguard Windsor (VWNDX) was up 7 percent over the past 12 months to rank below the midpoint of large value funds. Its three-year annualized return of 15 percent puts it in the top quarter of its peers.

Wellington Management runs 70 percent of assets, with fund manager David Fassnacht assuming responsibility for that portion a year ago.

The remaining 30 percent has been run since 1999 by the Sanford C. Bernstein investment firm, which takes a more diversified value approach.

A fourth of its holdings are in financial services, with industrial materials, health care and technology hardware other significant concentrations.

Largest holdings are Citigroup, Bank of America, Tyco International, Wyeth, Pfizer, Alcoa, Applied Materials, Cisco Systems and Sanofi-Aventis.

This "no-load" (no sales charge) fund requires a $3,000 minimum initial investment. It hasn't been disciplined by regulators in the past three years.

yourmoneytribune.com

Andrew Leckey writes for Tribune Media Services.

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