In its 76-year history, Dodge & Cox has launched precisely four mutual funds. The firm doesn't advertise and has no marketing department. Yet investors are so taken with its funds that it has had to shut half of its tiny lineup to new customers to stanch the flood of money.
Obviously, results attract customers, and Dodge & Cox's results have been marvelous. D&C Stock, the biggest fund, with assets of $57 billion, has clipped Standard & Poor's 500-stock index seven straight years (including the first eight months of 2006). Over the past 15 years, its annual return of 15% tops the S&P 500 by an average of four percentage points per year. D&C Income, which invests mostly in high-quality, medium-term taxable bonds, has outpaced its average peer in 16 of the past 17 years. Balanced, the oldest fund, dating to 1931, has been in the top 20% of similar funds in each of the past six years. And International has surpassed its average rival in each of its five years of existence. (International and Income are the only funds that are open to new customers.)
What's behind the success of Dodge & Cox?
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