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Top Fund Manager - Dana Emery, Dodge & Cox


As the Executive Vice President and Director of fixed income of Dodge & Cox, established in 1930, Dana Emery has been a major part of the firm's successes since 1983 after receiving her B.A. from Stanford University the same year. She is currently a Trustee and the Vice President of the Dodge Cox Funds, is a chartered investment counselor, a shareholder within the firm, and has CFA designation.

 

With Dana Emery, Dodge & Cox has seen their fund's assets grow to an astounding $19.79 billion as of April 20, 2010. The portfolio allocation consists of mostly bonds, no stocks, cash coming as the second highest investment, and other investments making up a small percentage. The firm prides itself in portfolio diversification and the independent research involved in ensuring a diverse portfolio.

 

Emery told Morningstar in September 2009 that Dodge & Cox focuses on finding securities that will be attractive over the long term and not so much the short term. They look at all areas that include government markets, asset-backed, mortgage, and corporate investment opportunities. The research is heavy and during the last recession this research led to Dodge & Cox to turn more toward corporate credits because the yield premium would be quite rewarding. This strategy increased the credit exposure of the portfolio by 10% in a year.

 

While the Dodge & Cox portfolio is comprised mainly of bonds, what won't be found in the portfolio are treasuries. Emery believes that it is not so much the credit that is risky, but the returns. During hard economic times, people will invest in treasuries more than other investments because of their security. This, however, drives up the prices and drives down their yields.

 

The returns that have been received by the Dodge & Cox fund have averaged a total of 7.63% over a 20 year period. This is higher than the average 7.15% by the BCAG index. This is in part to the significant investments in mortgage-related securities and corporate investments.

 

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