Mutual funds with very low turnover

Kaspa

Earlier discussion about Primecap funds reminded me of something that I had thought of following up on.
Does anyone here practice looking at low turnover funds to look for ideas to buy individual stocks? The reasons
can be many. Some of the these excellent funds are closed to new investors. Low turnover means the best ideas
of these funds can be proxy to get good returns on your own. You don't need to pay yearly expense ratio just to
hold those stocks. I am thinking of gradually transitioning my portfolio (especially in the mid-large cap value space)
to holding individual stocks and looking at this as one of the ways to look for ideas for further due diligence.

Old_Skeet

Hi Kaspa,

I own PGROX which now has a turnover of about three percent annually. It might be worth a look for ideas. I have provided a link for those interested.

http://portfolios.morningstar.com/fund/holdings?t=PGROX&region=usa&culture=en-US

Old_Skeet

bee

After a little investigation (emphasis on little) I have come up with a short list of low turnover equity funds:

Most Index Funds

Equity-centric Funds with less than 25% turnover:

LEXCX (0% turnover)
FAIRX(16%)
FLPSX(11%)
LCEIX(9%)
USAWX(16%)
VGHCX (21%)
ROGSX(15%)
TWEBX(8%)
FRUAX(5%)
DDVIX(6%)
NSEIX (22%)
ACSDX (12%)
LMPFX (2%)

Concentrated Funds with low turnover:
FAIRX
BCIFX
FPPFX
JENSX
and,
SHRAX - Clearbridge Investments portfolio manager Richie Freeman explains his brand of long-term investing:

Article:
Richie Freeman

davidrmoran

PRBLX, YACKX/YAFFX (all of whom beat most of these), TORYX (in a bad slump for some time), WVALX .... Anyone who overlooks the Yackts and Parnassus wrt pokiness of trading is missing out if they feel that criterion is crucially important.
Ditto MAPOX and FPACX.

mrdarcey

Kaspa said:

Does anyone here practice looking at low turnover funds to look for ideas to buy individual stocks?

Have started doing this, yes, but nothing actionable yet. My concern remains that by the time I know what any manager has bought, its been several months. Still can get some ideas to look around for some value.

Would add D&C and Wellington to the list, and second Parnassus, which led me to look at CHRW. Also BRTNX, which led me to look at microcap AMNF.

hank

Isn't a manager with high turnover working harder?

slick

Hi Kaspa,

I think it’s worthwhile to look at portfolios of low turnover funds, historically lower turnover funds have better returns. Here ‘s an alternate view: Figure out what your ideal sector allocation in equities should look like. Determine where your holes are or where you are overweight and then research which companies are the best ones to buy in those sectors. Basically top down, bottom up selections.

I like looking at themes, what sectors are likely to outperform in the future, not necessarily right now, but that show promise in the not too distant future There are numerous sources for articles and opinions which ones they are. If you are not interested in trying to do it yourself, why not hire an hourly rate financial advisor help you come up with a plan?

I know MFO has a combination of members that are do it yourselfers and some that use a financial advisor. I tend to be both. I like choosing some of my own stocks and funds, but also have ones my advisor recommended. I know that I could simply put everything in index funds and a few carefully chosen mutual funds and then set it and forget it. But where is the fun in that ? LOL. I love researching and finding new possibilities to give my portfolio some alpha. More than 80% of my equity side are well known stocks and funds that I consider long term holds, but I always like a few trading stocks that can capture a trend. Hope this helps.

Kaspa

Thank you everyone for your ideas. I will definitely research those and if I find any more interesting ones, I will post them here.

expatsp

He dees not run a mutual fund, but perhaps the best low turnover manager out there is Warren Buffett. I believe there are studies that show that investors who simply follow in his footsteps and buy what he does do well in the long term.

I put his holdings on a list to keep an eye on in case there's a correction. I bought AXP, USG, IR, PG, and NRG (plus PG and WFC for my mother) in 2007-9 through ths strategy and I hope to swap my energy holdings into XOM as he did at some point.

A watch list inspired by Buffett and cash on hand has been my best strategy for individual stocks -- and I've had a lot of bad strategies too.

Kaspa

Berkshire portfolio is definitely on my list. Another one on my list is the great SEQUX, only 2% turnover!

bee

Putting your final choices into Morninstar's "My Manager" tool might be an interesting way to see overlap and overlap concentration. I don't have a premium membership with M*, but instead have access through T. Rowe Price. Your brokerage may offer similar access. Good luck with what looks like a worthwhile strategy...keep us informed.

Mona

bee said:

Putting your final choices into Morninstar's "My Manager" tool might be an interesting way to see overlap and overlap concentration. I don't have a premium membership with M*, but instead have access through T. Rowe Price. Your brokerage may offer similar access. Good luck with what looks like a worthwhile strategy...keep us informed.

Hi bee,

Are the M* tools on T. Rowe Price the exact same as with the premium membership with M*?

Mona

bee

I'm not a M* premium member, but I do have an account at TRP.

Here is TRP information page of their tools and resources.
individual.troweprice.com/public/Retail/Planning-&-Research/Tools-&-Resources

It looks like a visitor (once registered) would have access to some of the following tools (M* portfolio manager):
individual.troweprice.com/public/Retail/Planning-&-Research/Tools-&-Resources/Investment-Planning/Portfolio-Manager