Q. I have heard about the Marsico Focus Fund for some time. Is this a good fund?
R.L., via the Internet
A. Longer term, this fund concentrated in about 30 stock names has been a great performer. Lately, not so much.
Financial stocks have hurt its performance, though portfolio manager Thomas Marsico remains convinced investors are underestimating potential and overestimating risk. The fund’s casino stock holdings, meanwhile, have continued to prosper.
The $4.9 billion Marsico Focus Fund (MFOCX) is up 10 percent over the past 12 months to rank in the lowest 10 percent of large-growth funds. Its three-year annualized return of nearly 13 percent ranks at the top one-fourth of its peers.
“Tom Marsico is a veteran growth investor really good at picking the themes and changes taking place in the overall economy and following them down to how they affect individual companies,” said Karen Dolan, analyst with Morningstar Inc. in Chicago. “We recommend this fund and believe it could be used as a core holding, though it needs to be paired with some other styles of funds.”
Marsico is not, for example, a big fan of tech stocks, typically a significant portion of growth funds, Dolan noted, and that could leave a gap in an investor’s diversification. In addition, having so few stock names increases risk.
The bulk of its portfolio consists of steady growth stocks held long term, though it does hold some fast growers and inexpensive names. Marsico started Marsico Capital Management and this fund in 1997 after success at two growth-oriented investment houses. His firm runs three other funds and has 16 analysts, five traders and two other portfolio managers.
Financial services represent about one-fourth of the Marsico Focus Fund’s assets, with other significant holdings in consumer services, health care and consumer goods.
This “no-load” (no sales charge) fund requires a $2,500 minimum initial investment and has an annual expense ratio of 1.24 percent. Marsico is a large shareholder in this fund. Seventy percent of its board is independent and all independent trustees have money invested in the fund.
Q. What is the difference between money-market funds and money-market accounts? My wife and I have a disagreement over this.
A.D., via the Internet
A. Both share the objectives of providing a short-term parking space or a liquid rainy-day investment with checking privileges:
*Money-market accounts are available at banks or credit unions. They are insured up to $100,000 by the Federal Deposit Insurance Corp. for non-retirement accounts.
*Money-market funds are primarily offered by mutual fund companies, though banks also may sell some as part of their proprietary brand of funds. Either way, they are not FDIC-insured.
Rates of insured money-market accounts will vary among banks because an institution can pay whatever it is willing to in order to attract your money, said George McBride, financial analyst with Bankrate.com in North Palm Beach, Fla. Some banks eager to attract deposits pay higher rates than competitors.
———-
More Top Picks Deals
Andrew Leckey is a Tribune Media Services columnist. E-mail him at yourmoney@ tribune.com.