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Morningstar

These Managers Like Big Bets

Some members of the Morningstar 500 carry concentrated positions.

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Fund managers taking big bets have long captured investors’ attention, as the biggest short-term winners and losers are often the most daring. However, cautious investors should keep an eye out for funds with high levels of company-specific risk and make sure they are comfortable with them for long time horizons.

The largest individual stock holdings of current members of the Morningstar 500 were drawn from the funds’ first-quarter portfolios. Here are a few members of the Morningstar 500 that have outsize bets in individual names.

AMG Yacktman Focused YAFFX

This fund’s name says it all. Stephen Yacktman and Jason Subotky are no strangers to big, concentrated positions. They take their mandate literally, as shown by a 14.2% position in

Parnassus Endeavor PARWX

Jerome Dodson has doubled down on

Matthews China MCHFX

If you invest $100 in this fund, $11 will go to

T. Rowe Price Global Technology PRGTX

This fund is no stranger to concentration, but what it doesn’t own is notable. The fund did not own any shares of

Fairholme FAIRX

It’s no surprise Fairholme makes this list. Combine a process that historically has been quite focused with a portfolio that has bled more than $15 billion since March 2011 and you end up with ultraconcentrated positions. The fund has huge stakes in Fannie and Freddie preferreds. In addition, it has a big bet on the equity of

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About the Author

Wiley Green

Analyst

Wiley Green is a manager research analyst for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. He covers multiasset strategies.

Before assuming his current role, Green was a member of the equity strategies manager research team. Before that, he worked on Morningstar’s global funds team as an operations data analyst, where he was primarily responsible for Morningstar Category classifications. He joined the firm in 2014 as a data analyst.

Green holds a bachelor’s degree in international economics with a concentration in Spanish and a minor in ceramic studio art from the University of Notre Dame. He is a Level III candidate in the Chartered Financial Analyst® program.

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