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“At the Morningstar Investment Conference, I had a chance to hear directly from manager of several of our ‘best buy’ funds,” says Mark Salzinger.

In his The No-Load Fund Investor, he discusses a pair of “contrarian” funds: Dodge & Cox Stock (DODGX) and T. Rowe Price Equity Income (PRFDX) recommended for long-term investors.

“The managements of these equity funds are sticking to its guns. In the case of Dodge & Cox Stock, this means a continuation of a contrarian focus on large out-of-favor stocks. often in equally out-of-favor sectors.

“In the case of T. Rowe Price Equity Income, this means a continuation of focus on high quality companies that appear historically cheap based on various levels of valuation, including their dividend yield relative to the market.

“Charles Pohl, the chief investment officer of Dodge & Cox and a member of the portfolio management team on DODGX, spoke strongly about what he considers to be the attractive opportunities in financials now that the sector is so out of favor.

“He says that the Dodge & Cox team is focusing on intense analysis of companies within subsets of the financial services industry, looking for stocks that have been beaten down with their peers despite superior operations, including safer historical underwriting standards.

“Financial recently accounted for 16% of the fund. Consumer discretionary, healthcare and technology all recently accounted for larger shares of the fund; thus, it’s no surprise that the fund has produced a loss of nearly 16% so far this year versus a loss of about 12% for the S&P 500.

“Nevertheless, we continue to include Dodge & Cox Stock within our ‘Best Buys’. The fund’s strategy is a proven success over several decades; its management team is deep, experienced and disciplined; and the expense ratio of 0.521% is miniscule.

"Brian Rogers, chief investment officer of T. Rowe Price and manager of Price Equity Income devoted most of his keynote presentation to the state of corporate governance, but also providing intriguing commentary on the financial markets.

“It stands to reason that the investment sentiments he expressed in his talk will be reflected eventually in his fund, which has lost slightly more than the market so far this year.

“Rogers spoke most pointedly about the commodities markets (especially energy) and the financial sector. Of the former, he said that ‘irrational exuberance’ had taken hold in some commodities markets.

“He also believes financials offer very attractive value opportunities at current levels for those who can stay invested for at least three years.

“He’s basing his optimism for a rebound in some financial services stocks on investor interest in turnarounds as well as on despondent sentiment in the sector. He’s relying on Price’s analysts to help him find the financial stocks with the best, most trustworthy management teams.

“Price Equity Income is a steady, above-average long-term performer, and we continue to include it among our “Best Buy’ fund selections.”