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Funds That Buy Like Buffett

Ten funds with the most Buffett-like taste in stocks.  

Morningstar Advisor, 06/11/2012

This article originally appeared in the June/July 2012 issue of MorningstarAdvisor magazine. To subscribe, please call 1-800-384-4000.

In honor of the Berkshire Hathaway BRK.B shareholder meeting in May, senior mutual fund analyst David Kathman calculated what mutual funds have the biggest weightings in Berkshire’s latest top 10 holdings (Coca-Cola KO, IBM IBM, Wells Fargo WFC, American Express AXP, Procter & Gamble PG, Kraft KFT, Munich Re MUV2, Wal-Mart WMT, Conoco-Phillips COP, and U.S. Bancorp USB, as of Dec. 31). Below are the 10 funds with the most Buffett-like taste in stocks. Kathman excluded sector funds, as well as funds with less than $100 million in assets and those with less than a five-year track record.

Kathman says that the funds on this list have mostly been strong long-term performers. All but Torray and Praxis Core Stock trounced their categories over the past five years. Six of them have also outperformed Berkshire Hathaway stock over that time, a period that includes two years (2009 and 2011) when Berkshire badly trailed the S&P 500 Index. Still, of the 10 funds on this list, only the two Yacktman funds have beaten Berkshire over the past 10 years, illustrating how tough it is to beat Buffett over the long term. “That long-term strength illustrates why so many people pay attention to Buffett’s portfolio,” Kathman says, “and why emulating his approach has been a winner over time.”

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