Turnaround Mutual Funds: Few in Number, but Good Returns


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Turnaround Mutual Funds; Few in Number, but Good Returns

While we normally focus on individual stocks, we also constantly stress the importance of diversification. We suspect that many subscribers like to use mutual funds, which provide built-in diversification. Therefore, from time to time we highlight mutual funds that may be of interest for turnaround investors. In April 2011 we identified a group of mutual funds that focused, at least to some degree, on turnaround situations. Then, in March of this year, we wrote up a number of funds that were in turnaround mode themselves. These funds had strong long-term records but were trying to rebound from poor results in 2011. In this article we revisit the funds with a turnaround focus. Then, we will revisit the rebound funds early in 2013 to see how they did this year.

It remains surprisingly difficult to find funds that focus on turnarounds. (Although perhaps we shouldn’t be so surprised. Maybe the scarcity of turnaround-oriented funds just proves our assertion that most mainstream investors shy away from turnaround situations--thereby giving them unusually good profit potential.

On the whole, our group of turnaround funds has done well recently. Of the 12 funds on our list, eight of them have outperformed the S&P 500 so far this year--and that is after subtracting the funds’ management fees. (We recognize that most funds compare their results to a variety of specialized benchmarks, but we believe that any fund that can outperform the S&P is doing pretty well.) This article is excerpted from the October 2012 issue of The Turnaround Letter. Read the full subscriber-only version for fund descriptions and full purchase recommendation details.





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Return of Volatility? No, Return of "Normal"

Sizeable market moves can increase the temptation to sell on downdrafts and buy on upswings; however, we strongly advise against attempting to do that. The chances of getting out at the right time and then back in again before the market rebounds are extremely slim. Read More.

Harnessing Activists to Help Find Turnaround Stocks

Activist investors often produce attractive returns for their clients; and you can still use their influence to help your position as a turnaround investor in two ways: Buy a position in a stock with the expectation that an activist will soon follow or buy after an activist takes a stake.


Value Investing


While one of the many dozens of activist funds might find their way to selecting your particular stock, this approach is likely to be frustrating and unrewarding. A better approach is to buy after the activist makes their move. Once an activist takes a stake in a company, how do you evaluate whether it is worthwhile to follow on? Admittedly, this is a bit of an art... Learn how you can harness the power of activist investors to find market-beating turnaround stocks.

Turnaround Letter Stock Pick Named Top Performer of 2017


stock market advicex


What Last Year's Top Stock Pickers Are Buying in 2018


This Forbes write-up follows up on the recent Top Stock Tips report--naming The Turnaround Letter's Crocs recommendation the top performer of 2017: With 90% gains, CROX beat out 100 other investment ideas included in the report; and the stock continues to have value investing appeal, according to Putnam.


George notes, "We see additional upside for the stock in 2018 as management's efforts continue to bear fruit, though the gains will likely be more muted than we saw in 2017."