Johnny would no doubt be proud.
Ask Bill Pekin what his Appleseed Fund does better than anyone else, and the portfolio manager has a ready answer.
“We’re a global all-cap value fund,” he responded at FPA Experience 2013 in Orlando on Sunday.
It doesn’t sound so special on the surface, but then again, it adheres to the precepts of socially responsible investing. As anyone in the SRI community will tell you, the vast majority of SRI funds are domestically-focused and growth, so it’s one of a handful of global SRI value funds available.
“We have one-third of the fund in global companies, one-third of the fund in domestic companies and one-third of the fund in gold and cash,” Pekin explained, when asked about his philosophy and strategy. “Its risk-averse nature means it tends to outperform in volatile markets and lag in robust markets.”
What that translates to is strong performance in 2008 and 2009, and weaker performance since. However, he noted the 4.5% yearly alpha average over the life of the fund.
The fund is a concentrated portfolio of approximately 30 stocks, each of which has a “margin of safety” of 50%, meaning there is significant upside to intrinsic value.
“We feel 30 stocks are the right number,” he added. “It’s better to know a lot about a few stocks than nothing about many.”