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Thoughts on Wintergreen Fund

I've been invested in Wintergreen fund for about 8 years now. I had been impressed with David Winters' prior track record at Mutual Discovery. The fund has lagged its category now over the past 1, 3, and 5 years and I am considering redeploying the assets between Artisan Global Equity and Grandeur Peaks Global Reach. If others on the board have followed or invested in Wintergreen and have any thoughts, I'd value your input. Thanks very much


  • I held the fund for several years after its inception. Sold after sluggish performance less than a year ago when he appeared on CNN? promoting himself. He'd not reduced the high ER despite accumulating a large asset base.
    I did, however, buy Nestle and Wynn Macao, his then current "finds". NSRGY is up 14% (so-so) and WYNMY is up 42% in less than a year (I bought it primarily for the 4% yield.) His arguments for NSRGY (formula and baby food in a more prosperous developing world) and WYNMY (the Chinese like to gamble and there are more newly rich, plus it paid 4% to wait) were convincing. Maybe the fund is too big for individual stock to move it much. Following recommendations here, I have holdings in the two funds you suggested. They will probably make you more than Wintergreen, which has underperformed its peers and outperformed its bogey - MSCI EAFE NR USD. But for and ER of 1.89% on $1.6, I'd smile for the camera and give even good advice away, since the purchases can only help my stock picks.
  • Thanks for your feedback STB65. Yes I've followed Winters for a number of years. He's respected in the financial press and appears on Wealthtrack and other shows often. But you're right... a high expense ratio for underperformance compared to his category. I am wondering if his underperformance is tied to underperformance in emerging markets.
  • If so, he'll eventually be back, but the GP funds will probably have built up a lead by then.
    Sorry that I left off the B - that's $1.6B x 0.0189 = >$30M (every year!! Doubt he buys lottery tickets.) Could buy a lot of research. No wonder funds rarely close.
  • edited February 2014
    The fund has not done quite as well as hoped since inception, although I think the last few years has seen Winters really bet on the emerging consumer in a significant manner. Depending on the company, that has either done well (Mastercard) or not (emerging market names like Genting.)

    I have a number of overlapping holdings with Wintergreen, including Nestle, which I recently added back in an attempt to go more conservative again. Nestle is never going to be an exciting holding, it's a SWAN - Sleep Well At Night. Well, aside from when they recall Hot Pockets for bad meat lol. In terms of formula and nutrition, Abbott (ABT) is a more boring play on that, with significant EM exposure.

    The Genting companies (which WGRNX holds and I don't, but have talked about before) have created amazing casino resorts in Asia and elsewhere, but the company (and its spin-offs) have been largely ignored by the market in favor of the Macau stocks. Jardine (which continues to be one of my largest holdings) had a disappointing year last year, but has gotten off to a good start this year and has a pretty remarkable long-term record. It remains a very long-term, largely get it and forget it (reinvesting divs) holding for me. I also have a smaller long-term holding in other Asian conglomerate Hutchison Whampoa.

    Coca-Cola has not done very well lately, and while Winters likely intended it as a play on the emerging consumer, you have the company's sugar-filled drinks coming under increasing scrutiny both in this country and elsewhere. Will Coke go anywhere? No, certainly not, but the company needs to evolve. An interesting semi-alternative play is FEMSA (FMX in the US), the Mexican conglomerate, which owns a stake in Heineken, a stake in Coca-Cola FEMSA (Coca-Cola Latin America, although it has begun to branch out) and Oxxo (an enormous convenience store chain in Mexico and Latin America.) I thought Wintergreen owned FEMSA at one point, but I don't see it in the latest SEC filing.

    Cielo (CIOXY in the US) has been one of the few Brazil plays that has held up okay (in comparison) - it used to be Visa Brazil until regulation and it is now a diversified credit card play. Wintergreen also has Mastercard, which has done exceedingly well until a bit of a dip recently. As I've noted before, I do like the credit card companies.

    Wintergreen also has nearly 20% of the fund in various tobacco companies, which I think effects the fund and there have been some developments negative to that industry (CVS not stocking it anymore, Walgreens may follow.) The new e-cigarettes have become big, but I dunno, I'm not seeing the real forward path for the tobacco industry. They haven't acted like they are going to be big in pot if it's legalized en masse.

    I like a number of Wintergreen's holdings, but own the ones I like most separately.
  • I look at Wintergreen as the anti-socially-conscious fund: tobacco, booze, sugary drinks. Maybe the high ER should be seen as a sin tax (lol).
  • Here's David: WealthTrack 7/19/13. US. News And World Report ranks WGRNX an expensive # 163 among World Stock Funds. Sell !!!
  • I had owned Wintergreen since inception. I sold my holding within the past year when I decided to move to the Artisan Global funds. I knew Wintergreen was expensive, but I expected the fund to do better during down markets. Then 2008 happened and I didn't feel as though I received nearly 2% worth of protection.
  • edited February 2014
    BenWP said:

    I look at Wintergreen as the anti-socially-conscious fund: tobacco, booze, sugary drinks. Maybe the high ER should be seen as a sin tax (lol).

    VICEX is a good play on that. I own alcohol companies, but never saw the interest in tobacco companies. I wouldn't want anything to do with Coca-cola, either from an investment standpoint, but I certainly drink enough Diet Coke.

  • I believe that David Winters knows what he is doing, and I consider him to probably be an above average fund manager.

    The expense ratio of 1.89% is excessive, unacceptable, indefensible, and an absolute deal-breaker. Considering trading costs, an investor's total costs are going to be well over 2%.

    For any manager to beat an appropriate benchmark by 2% annualized over an extended period before costs is a difficult thing. IF he were able to do this, you would only match that benchmark.

    The game is very difficult to win when you start out with a handicap like this. Not impossible, but difficult. Very difficult.

    I notice the new funds you are considering also have high fees -- nearly as high as Wintergreen.

    For a world stock fund, what advantages do you believe these funds would possess over say, Dodge and Cox Global Stock (DODWX) ER 0.65% or Vanguard Total World Stock Index (VT) ER 0.19%. ?

    Do you believe that you can give VT a 2% annualized head start and still stand better than even odds of beating it. If you do, I must respectfully disagree.

  • edited February 2014
    I would agree a lot with dryflower's comments. I think I've read attempts to justify the fee by acting like it was a hedge fund or something of that regard, but Wintergreen has never really shorted anything much (aside from a short in Blackstone for a while during the crisis) and it doesn't really do anything much out of the ordinary. Is there flexibility? Maybe, but not that much evidence of it. I do agree a lot with Winters, but I do think that the expense ratio is out of line (and the $10K minimum is probably the attempt to attract more serious investors, but money runs when things get bad either way) and the fund is made out to be more than it is to some degree. I do think Winters knows what he's doing, though.
  • Let's not sugar coat it or beat around the bush, and call a spade a spade, David Winters is no Max Heine or Michael Price. The Wintergreen Fund is one drumstick away from getting my turkey award.

    Lipper Snapshot Of WGRNX:
  • I got into Wintergreen at inception because I was very impressed with the job David Winters did as manager of the Mutual Beacon Fund. I felt that he was excellent at risk management, and getting a good risk adjusted return. Wintergreen is supposed to be a go anywhere, do anything value fund, with maximum manager flexibility.

    I just watched the WealthTrack video posted by Ted above (Thanks Ted):

    I found David Winters to be pretty impressive in that Wealthtrack video

    His performance was excellent in 2010 and 2011, and poor in 2012 and 2013.

    His 2008 performance was poor, I believe -39%, and disappointing as one of the main reasons I purchased the fund was for risk management and good down market relative performance.

    I'm sticking with David Winters for now, although I agree with dryflower that the expense ratio is excessive, unacceptable, and indefensible. I just went to the fund's website to find a contact email address to express my concerns about that unacceptable expense ratio.......couldn't find the email address. I'm going to call the fund's transfer agent and see if I can get an email address to express these concerns.
  • Not sure if the -39% return for 2008 is correct. The data on Yahoo Finance is not consistent with itself. Yahoo shows the 2008 return as -39%, but then they also show quarterly returns, and when I add up the quarterly returns for 2008, it looks like Wintergreen did much worse than -39%. Morningstar is only showing each year's return back to 2009.
  • Dear rjb112,

    Actually, the Yahoo data are consistent. I can see how you might make the mistake of adding the quarterly returns, but that's not the way it works.

    What you are forgetting is that each quarterly loss is a loss from the value at the beginning of the quarter, not the (larger) value that existed at the beginning of the year.

    If you are willing to take instruction from a Moron, I will explain it to you completely.

    Yahoo's figures from 2008 show the following quarterly losses:

    (6.51) in other words .9349 of the starting value

    (5.87) .9413 of the staring value

    (12.15) .8785 of the staring value

    (21.16) .7884 of the starting value

    So if we start the year 2008 with a value of 100, we have 93.49 left at the end of the first quarter.

    93.49 x .9413 = 88.002

    88.002 x .8785 = 77.309

    77.309 x .7884 = 60.95 (end of year value)

    Starting Value 100 - 60.95 = a loss of 39.05
  • And I thought I was the only one to invest in this fund when it opened!

    Needless to say, I was hoping when I sent my check that I would get even better returns than I was enjoying from my investments in the Mutual Series funds (which I've been in for over 30 years and continue to hold). Figured a great manager would get superior results with a new fund that he totally controlled. Nope.

    My Mutual Series funds have performed better with less risk. I noticed recently that the money I invested at the same time in Meridian Value and Meridian Equity income are far ahead of my investment in Wintergreen.

    This is not the first time I was disappointed when I followed a manager. I think we need to give due credit to a fund's management and analysts, and not just to the marquee manager, when we evaluate a fund.
  • dryflower, 3:04PM.
    Dryflower, thanks for that excellent explanation. Great job.
  • rjb112 said:

    Morningstar is only showing each year's return back to 2009.

    On the M* 'performance' pages, you have to click "expanded view" to get returns further back than 5 full years. M* shows WGRNX lost 39.05% in '08.

  • AndyJ said:

    rjb112 said:

    Morningstar is only showing each year's return back to 2009.

    On the M* 'performance' pages, you have to click "expanded view" to get returns further back than 5 full years. M* shows WGRNX lost 39.05% in '08.

    I think that was what disappointed me - I was expecting the fund to handle 2008 better than it did.
  • edited February 2014
    I look at Wintergreen as the anti-socially-conscious fund: tobacco, booze, sugary drinks. Maybe the high ER should be seen as a sin tax (lol).

    Gotta love it.

  • thanks to each of you for your comments on Wintergreen and David Winters. You've pointed out many of the same concerns that I had.. I have decided to go ahead and sell the fund. Dryflower your comments about excessive expense fees are right on. Its even harder for me to justify holding this fund when I see that Winters has 30% of the fund in just two stocks -- Berkshire and Coke. In regards to the other funds I'm considering -- Artisan Global Equity and Grandeur Peaks Global Reach. Mark Yockey has shown a consistent ability to beat both his category and comparable indexes with each of the funds that he has managed including Artisan International, International Small Cap, and now Global Equity. That's what I'm paying for with the 1.5% expense ration. And with Grandeur Peaks I'm buying a slice of the market, global micro and small caps, that I feel really needs an active manager. Scott, thanks very much for your detailed analysis of Winters' holdings. That was very helpful. You really do your homework. Charles, thanks so much for MFO risk and return ratings on Wintergreen.
  • I followed for a short time and decided Winters was more noise than action.
  • edited March 2014
    Wintergreen 2013 Annual Report:
    Dear Fellow Wintergreen Fund (Trades, Portfolio) Shareholder,

    2013 seemed to be the year when the quality, valuations, and risks of businesses ceased to matter to most stock market participants. The Standard & Poor's 500 Composite Index ("S&P 500 (INDEXSP:.INX)") remarkable rise for the year was its best return since 1997 during the run-up of the technology bubble. The ten best performing names in the S&P 500 had extremely high returns, while carrying an average price-to-earnings multiple of 58. Among these top performers were a struggling retailer (Best Buy Co., Inc. (NYSE:BBY)), a recently bankrupt airline (Delta Air Lines, Inc. (NYSE:DAL)), a brokerage still digging itself out from the finanacial crisis (E TRADE Financial Corporation (NASDAQ:ETFC)), a biotechnology company (Celgene Corporation (NASDAQ:CELG)), and two poster children of a potential new internet bubble (Netflix, Inc. (NASDAQ:NFLX) and Facebook Inc (NASDAQ:FB)). We believe the extraordinary returns on securities we view as highly speculative names are a microcosm of the broader market in 2013 - market participants moving down the quality spectrum in search of returns, without regard for and understanding of risks and valuations. We believe overseas securities languished and emerging markets became the scapegoat of popular opinion.The widespread appetite for risk has been fueled in part by years of artificially low interest rates in most developed markets around the world. When safe high-quality assets yield a fraction of one percent, it isn't surprising to see many investors flock to high-risk, high-reward investments, be it junk bonds or speculative equities. This is exemplified by high-yield bond spreads approaching historical lows, sub-prime mortgages being bid up 17% in the past year, and speculative equities posting triple-digit gains. Classic fundamental analysis of business values, a keystone in true investing, was replaced with an insatiable desire for returns at any cost and often a failure to acknowledge the inherent risk of many investment vehicles.

    There is a popular Wall Street notion that momentum trading (i.e., buying stocks that have recently risen in price solely because they have recently risen in price) allows someone to hop from trend to trend as if they are a surfer riding the crest of a wave, and that this will enable one to trade their way to wealth. This "quick and easy" approach to speculating, which has been sold to investors in a relentless media blitz accompanying the latest bull market, is seldom successful in the long-run. More often, people don't get just wet, but financially soaked.

  • @Kenster1: I'd rather listen to Barbra sing Evergreen than read about Wintegreen Annual Report

    Evergreen: Barbra Streisand;
  • Hey Kenster,
    Thanks so much for sharing the information from the annual report. Much appreciated.
  • @MikeW: What about Barbra, isn't she appreciated ?
  • I'm confused? David Winters is an avid reader of "The Intelligent Investor" - so shouldn't we also be avid readers of Mr. Winters? Isn't he a "great investor?"

    Nah, I'm not much into Barbara --- I'd rather watch Scarlett Johansson or Kate Upton try to sing however they like.

    By the way - I thought Colorado was the only State where you can legally smoke pot?

  • Wintergreen's track record has not been as hoped, but I do agree with a great deal of what he said above - there have been a number of graphs where the most shorted/lower quality names have substantially outperformed in the last year or two.
  • edited March 2014
    I too like the way he thinks and his investment approach. But ultimately, I've never been able to reconcile 1.9% ER on $1.7B in assets for what is essentially a one-man shop running a long only, buy-and-hold, global value equity fund...with, as Scott notes, an OK track record that has not especially lived-up to expectations...those generated while he was skipper at Mutual.
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