VANGUARD DIVIDEND GROWTH (VDIGX)
This fund’s 5-year return ranks in the top 3 percent among its peers, and its 2008 loss was a relatively small 26 percent. It’s one of the standout managed funds at Vanguard, best known for index funds. With an expense ratio of just 0.31 percent, it’s among the lowest-cost managed funds. The emphasis in the portfolio of around 50 stocks is dividend-payers. Recent top holdings include PepsiCo, Johnson & Johnson and Occidental Petroleum. Don Kilbride has run the fund the past six years, and has more than $1 million personally invested in the fund.
SEQUOIA FUND (SEQUX)
This fund’s 3- and 5-year records rank within the top 2 percent of its peers. Managers Robert Goldfarb and David Poppe typically hold just 10 to 25 favored stocks, and stick with them for years. Recent top holdings include Valeant Pharmaceuticals and TJX Cos., owner of the T.J. Maxx and Marshalls retail chains. The fund recently had nearly 18 percent of its portfolio held in cash, which could provide a cushion if the market drops. In 2008, Sequoia lost a relatively modest 27 percent.
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