Plus, Fairholme's Berkowitz increases AIG stake, and more.
A solid large-blend fund has just gotten cheaper. BBH announced a reduction in the net expense ratio for BBH Core Select
Rick Witmer, Tim Hartch, and Michael Keller manage this concentrated (it regularly holds around 30 stocks), low-turnover fund in a deliberate manner. They look for companies with great balance sheets, high returns on invested capital, and strong free cash flows whose shares are trading at 25% or more below their estimate of the stocks' intrinsic value. Since Witmer and Hartch took over in October 2005 (Keller became comanager in mid-2008) through Sept. 21, the fund has gained 5.1% annualized, while the S&P 500 Index and the typical peer have gained 0.6% and 0.3%, respectively.
Fairholme's Berkowitz Ups AIG Stake
Fairholme Capital, advisor to Fairholme Fund
Fairholme manager Bruce Berkowitz began building a stake in insurer AIG earlier this year as part of a larger move into financial companies. In March, Fairholme Capital owned more than 13 million of AIG's shares, more than 20% of some tranches of the firm's convertible debt, and other AIG bonds. In April, Fairholme Capital indicated in a filing that it was AIG's largest shareholder after the U.S. government. As of the May 31 portfolio, the fund owned more than 28 million AIG shares, 6.8% of the fund's assets.
Fairholme is the top-performing large-blend fund over three-, five-, and 10-year periods, and it's up 7.7% for the year, while the S&P 500 Index is up 3.2% and the typical rival's gain is 2.3%.
Vanguard Launches Funds and ETFs Tracking Russell Indexes
Two weeks after it introduced a batch of new S&P domestic-equity index funds and exchange-traded funds, Vanguard rolled out seven passive stock funds and ETFs based on Russell benchmarks. The firm first filed for both the S&P and Russell index funds in June. The new funds will track the Russell 3000 as well as the value, growth, and blend portions of the large-cap Russell 1000 Index and small-cap focused Russell 2000. Institutional fund shares will charge 0.08% in fees, while the ETF shares will range from 0.12% to 0.20%. The minimum investment for the institutional shares is $5 million.
Vanguard also plans to launch its first municipal-bond index funds and ETFs as well as a new global real estate fund and ETF.
Dreman Steps Down as Co-CIO of Dreman Value Management
Longtime value investor David Dreman is stepping down as co-chief investment officer of Dreman Value Management, the firm he started more than three decades ago. E. Clifton Hoover, who has served as co-chief investment officer with Dreman since 2006, will become the sole CIO on Oct. 31. Hoover is also co-director of research, portfolio manager, and managing director. The transition has been planned for several years.