Our 2007 Income Top Pick for the Dick Davis Income Digest
Below is the entry we submitted today:
Our 2007 Income Top Pick is the Dodge & Cox Income fund (DODIX). This no-load mutual fund invests in a mixture of securities including U.S. Treasuries, mortgage bonds and corporate bonds. Fund managers have wisely kept the fund’s duration relatively low in recent years and the fund is currently yielding 4.8%. In our view, the Fed will cut rates multiple times in 2007 and this fund is aligned to perform well in that environment. This no-load mutual fund has a reasonable expense ratio of 0.44% and it has an initial minimum investment of $2,500 in regular accounts and $1,000 in IRA accounts. Although it will be a challenge for this fund to match the double-digit returns of our 2006 Income Top Pick selection, we expect this fund will provide fixed income investors with solid returns in 2007.
Robert M. Brinker CFS, Editor
Brinker Fixed Income Advi$or
858 Happy Canyon Rd., Suite 255
Castle Rock, Colorado 80108
Our selection in 2006 was the Fidelity Convertible Securities no-load mutual fund (Symbol: FCVSX). Through 12/18/06 the fund has a total return of 15.2%. Lets hope our 2007 selection performs as well as last year’s choice. If the Fed cuts rates a few times as we expect it should be a great year for bond funds that overwieght the short end of the Treasury yield curve.