URGENT UPDATE: The Dodge & Cox Income Fund is navigating significant changes as CEO Dana Emery prepares to retire at the end of 2025, marking a pivotal moment for the investment powerhouse. Emery, who has spent over four decades with the firm, will hand over leadership to José Ursua, a seasoned global bond specialist, who was promoted to portfolio manager earlier this year.
This transition comes at a critical time, with the fund’s robust investment approach and adept team facing the challenge of maintaining its competitive edge. The investment team, comprised of eight experienced managers with an average of over twenty years in the industry, is known for its patient and sometimes contrarian investing style. As of June 2025, the fund’s allocation to corporate bonds has been reduced to 30% of its assets, the lowest in its historical range, while Treasuries now account for 15% and securitized debt, primarily agency mortgage-backed securities, dominates at 50%.
The impact of this leadership change is already being scrutinized. With Emery’s departure, the investment committee’s depth will be crucial in navigating the adjustments. Historically, Dodge & Cox has excelled in exploiting market corrections, leading to a remarkable 3.1% annualized gain over the past ten years, outperforming 89% of its peers by August 2025.
Dodge & Cox’s strategy has often favored corporate credit due to its yield advantages. The firm was proactive in ramping up corporate credit exposure during downturns, such as the first-quarter selloff of 2020 and the tumultuous first half of 2022. However, recent assessments show fewer credit market opportunities, prompting strategic adjustments that have resulted in a more defensive portfolio. The fund has also gradually increased its duration to 6.3 years, slightly above the 6.1 years benchmark of the Bloomberg US Aggregate Bond Index, reflecting a conservative tilt in its investment approach.
Investors are keenly watching how these changes will affect the fund’s performance, especially as it has been characterized by its sensitivity to credit market swings. During the 2020 credit selloff, the fund’s I share class suffered a 6.9% loss, trailing behind two-thirds of its peers. Yet, its reputation for acquiring corporates at attractive valuations facilitated a strong rebound, achieving a best-decile return of 7.7% in 2023.
The ongoing growth in assets under management over the past two years adds another layer of complexity. While current capacity issues are not anticipated, the firm is closely monitoring the situation to ensure it remains nimble and competitive.
As Dodge & Cox Income adapts to this leadership transition, the investment community is poised to see how the new management will uphold the fund’s legacy while navigating evolving market landscapes. Investors and stakeholders alike are urged to stay tuned for further developments.
