Dodge & Cox Reopens Stock and Balanced Funds

According to a statement released yesterday, Dodge & Cox will reopen its flagship Stock fund and Balanced fund next Monday, February 4th. The two funds were closed to new investors since 2004, though existing shareholders can still invest in both of them.

In the statement, the company cited the lackluster return of both funds in 2007, which caused investors redemption, as the main reason for the reopening. Indeed, in 2007, the Stock fund (DODGX) returned a meager 0.1%, trailing the S&P index by 5.4%, while the Balanced fund (DODBX) had a negative gain of 3.1%. However, both funds have beaten their peers easily in the past 10 years. DODGX has a 10-year annualized return of 10.87% and DODBX gained 9.5% on average during the same period.

We own both the funds plus the International fund (DODFX) and they have been our core investments for many years. Despite the dismal performance last year, I have no plan to shift to any other funds. And if you are interested in buying these two funds that have been great for investors for many years, the opportunity to get them is now.

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