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From Barron's 7-23-07:

"The Dodge & Cox Income Fund (DODIX) isn't jazzy. It isn't loaded with emerging-market junk bonds, which have generated big returns in recent years, or other exotica. But its overall approach, which emphasizes fundamental analysis of domestic investment-grade bonds, has paid off nicely for investors.

The fund's one-, three- and five-year returns also land in the group's top quartile. Morningstar bestows a five-star rating on the fund, whose assets total about $14 billion.
The fund aims to generate a high and stable income stream and preserve capital.

Although it is focused on debt securities, the portfolio team members seem a lot like value-oriented stockpickers. "We are very focused on the basics of the industry and the company, and combining that with the terms and conditions on the actual bonds we're investing in," says Dana Emery, portfolio manager of the fund.

The Income Fund has 31.6% of its assets in corporate bonds, versus 18.6% for the benchmark. But the portfolio managers have dialed down their exposure to corporate debt in recent years, noting that spreads have narrowed since the early part of the decade when these securities went through a tough credit cycle. Today, says Emery, "You have significantly less reward investing in corporate bonds."

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