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Fund Times

A Hidden Gem Gets Cheaper

Plus, Fairholme's Berkowitz increases AIG stake, and more.

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A solid large-blend fund has just gotten cheaper. BBH announced a reduction in the net expense ratio for  BBH Core Select (BBTEX) from 1.19% to 1.00%. The firm said it is passing on some of the fund's economies of scale to shareholders. The fund's assets have increased from less than $100 million in 2006 to more than $330 million today thanks to strong inflows and performance.

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.

Courtney Goethals Dobrow does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.