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3 Contrarian Fund Picks: Morningstar Research Director

As a new year of trading kicks off, a handful of funds may recover from back to back years of disappointing returns. John Rekenthaler, research director at Morningstar, shared his best buying opportunities with investors.

Contrarian Investment Ideas

“These are contrarian picks,” Rekenthaler told CNBC.

“If you looked two years ago, they looked terrific, but with these two very weak years dominating their records, these are not highly rated funds.”

Rekenthaler’s Recommendations:

CGM Focus Fund—“About 1 to 2 years out of every 5 are absolutely terrible [for the fund],” he said. “It’s focused on companies that are improving their earnings or are going to post better than expected earnings.”

Rekenthaler said CGM Focus still tops nearly all its peers over the past decade.

Brandywine Blue—The fund covers “the worst performing category of the decade and I think this decade will treat that asset class a little better,” he said.

Bridgeway Smallcap Value

  • Watch Rekenthaler's Previous Appearance on CNBC (Aug. 10, 2009)

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No immediate information was available for Rekenthaler or his firm.