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Vanguard Primecap Core
Vanguard Primecap Core
Manager: Howard Schow and five co-managers
Expense ratio: 0.55%
Category: Large growth
One-year return: -39.9%
Return since inception (2004): -4.3% (annualized)
Get quote: VPCCX

Each of the six veteran managers of Vanguard's Primecap Core oversees a slice of the fund, making his own buy-and-sell decisions, though each adheres to the same philosophy: Look for unappreciated growth stocks, then wait patiently for them to pay off. Though Primecap Core was launched just four years ago, the same six managers have steered the Primecap fund for Vanguard since 1984, generating 12% in average annual returns, some 2.6 percentage points better than the S&P 500. That fund has long been closed to new investors, but the smaller and more flexible Primecap Core holds many of the same stocks - and makes many of the same outsized sector bets.

The managers have been loading up on health care, technology, and consumer discretionary stocks, which now account for nearly two-thirds of the portfolio. In fact six of the fund's ten largest holdings are health-care companies: Amgen, Novartis, Eli Lilly, Medtronic, GlaxoSmithKline, and Roche. "In our view," the managers wrote in a recent report, "investors are overlooking some companies' promising drug pipelines, exciting and innovative new medical devices, and valuations that are near 30-year lows."

NEXT: Longleaf Partners
Last updated December 18 2008: 9:36 AM ET
All returns based on data through Dec. 1.
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