Great ideas for investment opportunities can often be found when reviewing the investment decisions of great investors. When Barron’s reported on 19 mutal funds that have beaten famed mutual fund manager Bill Miller over the past 15 years, I decided to take a closer look at the holdings of these top fund managers. Below I list out the 20 funds with links to their detailed mutual fund information offerings and the list of their top 25 holdings as reported by Morningstar:
- FPA Capital Fund managed by Robert L. Rodriguez – Top holdings
- Fidelity Low-Priced Stock managed by Joel Tillinghast – Top holdings
- Calamos Growth A managed by John and Nick Calamos – Top holdings
- Heartland Value managed by William Nasgovitz – Top holdings
- Columbia Acorn Z managed by Charles McQuaid and Robert Mohn – Top holdings
- ICM Small Company managed by Robert McDorman – Top holdings
- Hartford Capital Appreciation HLS managed by Saul Pannell – Top holdings
- DFA U.S. Micro Cap team managed – Top holdings
- Merrill Lynch Value Opportunities managed by R. Elise Baum – Top holdings
- Muhlenkamp managed by Ron H. Muhlenkamp – Top holdings
- Federated Kaufmann K managed by Lawrence Auriana and Hans Utsch – Top holdings
- Hotchkis and Wiley Small Cap Value I managed by Jim Miles – Top holdings
- Janus Small Cap Value Instl. managed by Tom and Tod Perkins – Top holdings
- Neuberger Genesis managed by D’Alelio and Vale – Top holdings
- Laudus Rosenberg U.S. Small Cap Instl. managed by William Rick – Top holdings
- Wasatch Core Growth managed by J.B. Taylor – Top holdings
- Mairs and Power Growth managed by William B Freis – Top holdings
- Third Avenue Value managed by Martin J. Whitman – Top holdings
- Skyline Sepecial Equities managed by William Fiedler – Top holdings
- Legg Mason Value Trust managed by Bill Miller – Top holdings
In addition to beating Bill Miller’s performance over the past 15 years, I discovered that FPA Capital, Fidelity Low-Priced Stock, Calamos Growth A, Columbia Acorn Z, Muhlenkamp, Hotchkis and Wiley Small Cap Value I, Janus Small Cap Value, Neuberger Genesis, and Wasatch Core Growth also outperformed Miller’s Legg Mason Value Trust in the past five and ten year periods. Looking at the ten and five year performance records in addition to the fifteen year performance period helps eliminate funds that outperformed Bill Miller due to just short periods of high performance.
I also quickly examined the investment philosophy of these funds. Calamos Growth, Federated Kaufmann, Hartford Capital Appreciation, and Mairs and Power Growth are primarily large-cap growth funds. Columbia Acorn and Wasatch Core Growth are invested in mid- and small- cap growth stocks. DFA U.S. Micro and Laudus Rosenberg U.S. Small Cap are both quant funds focusing on small companies. Muhlenkamp and Legg Mason Value Trust are large-cap value funds. Third Avenue Value is a blended value fund, while Merrill Lynch Value Opportunities is a mid-cap value fund. Fidelity Low-Priced Stock, FPA Capital, Hearthland Value, ICM Small Company, Hotchkis and Wiley Small Cap Value I, Janus Small Cap Value, Neurberger Genesis, Laudus Rosenberg U.S. Small, and Skyline Special Equities invest in small-cap value stocks. Not surprisingly, most of the top funds are value oriented funds.
I took a look at what some of the top value funds have been doing. FPA appears to be adding cash into Treasury Notes. I noticed that William Nasgovitz of Heartland added to his position in Stewart and Stevenson Services (SVC). Robert McDorman of ICM Small Company added to his position in Scottish Re Group (SCT). Muhlenkamp seems to be adding a strong concentration in financial stocks including Capital One Financial, Allstate, American International Group, and Citigroup. H & W added a new position, Mercury Interactive (MERQ). However, it looks like they added this stock after its recent scandal which sent it to the pink sheets. Janus Small Cap Value upped their position in Kaydon (KDN). Bill Miller recently added Sprint Nextel (S) and Expedia (EXPE) to his portfolio. I’ll be visiting this list later in the year to see what other new purchases these top fund managers make.