Christine Benz: Hi, I'm Christine Benz for Morningstar.com. As Berkshire Hathaway has grown in size, some analysts, including Morningstar's Gregg Warren, have raised concerns that the firm may have trouble growing as rapidly as it did in the past. While Warren Buffett is the world's greatest living investor, it's possible to find mutual funds that employ a similar patient, quality-conscious strategy and do so in a more nimble package. We reached out to our analyst team to identify three such funds.
Alec Lucas: FMI Large Cap's long-time manager, Patrick English, helped install the firm's now committee-based, value-oriented approach that has produced fantastic results over full market cycles. Their approach is very value-oriented in that they look for a meaningful discount to a company's intrinsic value. Their top holding is Berkshire Hathaway, but what makes them like Warren Buffett is not that they hold this company, but it is in how they invest in terms of looking for good businesses, trading at reasonable if not great prices. They are more prone than Buffett, perhaps, to take advantage of Mr. Market's 1:00 highs and lows and are willing to sell based on valuation. They also pay heed to Buffett's dictum that size is an anchor to investment performance. They pay close attention to the fund's capacity and are willing to close it to new investors to protect current shareholders. It's currently open, and it is worth investors' notice.
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David Kathman does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.