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True "Value" Funds Hard to Find

Mark Hulbert's column today in the WSJ Investing in Funds section is quite revealing. For those who subscribe:

For those who don't, Hulbert points out, citing a study by a trio of academics, that no ETFs and only a couple of nearly unknown OEFs really invest in pure value stocks, those "that trade for the lowest ratios of price to book value."

Maybe our members have a favorite value investor or fund to offer by way of rebuttal.


  • edited February 2019
    I don't have access to the article. But....the emerging markets fund I mentioned in the recent Emerging Market Funds thread is offered by a firm that represents itself as a classic value fund shop. PZVEX invests only in stocks in the lowest "normalized" P/E ratio quintile at the time of purchase.

    M* puts the fund's P/B ratio at 0.90 vs 1.70 for the category average....but that doesn't say what the ratio looked like at the time of initial stock purchase.

    Here is how the Pzena folks describe their investment process:

    This info is not offered as a "rebutal" but rather just as an example of a firm that labels itself as a classic value shop......

  • That's good analysis, @davfor. Thanks.
  • edited February 2019
    I deserted OAKBX late in 2018 after a near 15-year marriage. It got ravaged during the December market rout. It is, of course, supposed to be a value fund. BTW - It’s been hot ever since I left. :)

    Interested what folks think of these top 25 holdings. Is that fund still true to its value roots, or has it morphed into something else? Thanks for any observations.

    Symbol Name % Weight

    GM General Motors Co 4.95%
    BAC Bank of America Corporation 4.80%
    TEL TE Connectivity Ltd 3.93%
    -- United States Treasury Notes 1.25%
    MA Mastercard Inc A 3.11%
    NSRGY Nestle SA ADR 2.98%
    CVS CVS Health Corp 2.58%
    UNH UnitedHealth Group Inc 2.36%
    DEO Diageo PLC ADR 2.26%
    GOOG Alphabet Inc Class C 2.18%
    PM Philip Morris International Inc 2.12%
    -- United States Treasury Notes 2.12%
    C Citigroup Inc 1.82%
    CHTR Charter Communications Inc A. 1.78%
    -- United States Treasury Notes 1.75%
    FL Foot Locker Inc 1.73%
    ORCL Oracle Corp 1.69%
    ALLY Ally Financial Inc 1.67%
    BWA BorgWarner Inc 1.63%
    -- United States Treasury Notes 2.38%
    -- United States Treasury Notes 1.62%
    NOV National Oilwell Varco Inc 1.41%
    LEA Lear Corp 1.30%
    GLEN Glencore PLC 1.30%
    AIG American International Group Inc. 1.23%

  • The Hulbert article offers the following list of value stocks for the DIYer who can't find a fund for the job:

    • Bank OZK OZK 3.55% (OZK)
    • Brighthouse Financial BHF -0.83% (BHF)
    • Capital One Financial COF 0.63% (COF)
    • Citigroup C 0.61% (C)
    • Goldman Sachs GS 0.60% (GS)
    • Gulfport Energy GPOR -0.12% (GPOR)
    • Mallinckrodt MNK -0.67% PLC (MNK)
    • New York Community Bancorp (NYCB)
    • PennyMac Mortgage Investment Trust PMT 1.24% (PMT)

    Financial services figure prominently. OAKBX has a few, but Citigroup is the only one in common.

  • edited February 2019
    I haven't looked recently at the holdings data for TWEIX and FLPSX, and doubtless the study considered such; but I do wonder if CAPE at least fits relative, perhaps not 'true', value criteria. It's supposed to, I believe.
  • edited February 2019
    (Unable to read the wsj article.)

    I’ve normally gravitated to funds that preached value investing. There are are many different ways to define what a “value stock” represents. But the most important thing IMHO is that the “worst news” has already been discounted by the market so that these stocks aren’t likely to fall much further. Should be just the recipe for a patient long term investor.

    Obviously, value hasn’t been the place to be for at least a decade. But it would be sad if managers who preach value investing were to begin acting contrary to the contract they have with their investors and stray from the value approach in search of better return.

    Louis Navellier made 10 recommendations in late 2018 for stocks he felt were top value picks.

    Here’s Navellier’s list

    Wendy’s, Boeing, Intel, Microsoft, Amazon?, Berkshire Hathaway, J.P. Morgan Chase, Proctor & Gamble, United Health Care, Chevron

    Of the above, only one, United Health Care, is among OAKBX’s top 25 holdings (my previous post).

    :) Just noticed OAKBX holds Phillip Morris. Hard to argue with that one. I think it’s been considered a “value stock” for about as long as I’ve been investing (50 years).

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