A Preview of Sequoia's Coming Attractions
Greater diversification means a host of new names.
Sequoia (SEQUX) has gradually transformed itself during the past decade. We've chronicled its evolution from one of the most concentrated equity funds into a more diversified offering. Ten years ago, the portfolio included just 15 stocks with more than 95% of assets in the fund's top 10 holdings--nearly a third in Berkshire Hathaway (BRK.B) alone. A decade later, the number of holdings has tripled and the top 10 holdings claim just 52% of assets. It has gone from being easily one of the most concentrated funds to not even making the large-blend category's most-concentrated 10%.
Much of this transformation has occurred in the past three years. In mid-2009, the fund still had just 25 holdings. However, comanagers Bob Goldfarb and David Poppe have added 11 new stocks since June 2011 alone. These additions owe in part to the firm's aggressive analyst hiring. The staff has doubled since 2006, giving the team ample new capacity. Although the team follows a generalist model, several new hires bring expertise in technology, an area the fund had avoided in decades past.
Kevin McDevitt has a position in the following securities mentioned above: SEQUX. Find out about Morningstar’s editorial policies.