What if we wanted to look at the difference in stock picking decisions between the most stable funds (those with the least amount of turnover) and the most active funds? Let’s find out. We’ll take the 10 funds with the least amount of turnover and compare holdings to the top 10 funds with the most turnover and then find the highest conviction stock picks from each group.
For the pool of filers to choose from I am going to include any filer that has at least two email alert registrations in Whalewisdom’s alert service. The thinking here being that if there are users out there interested in knowing when a particular filer releases a 13f than that filer is likely interesting to us as well. I’m also going to exclude funds that have more than 1,000 individual holdings to avoid the large institutional investors.
To calculate the turnover percentage we’re only counting newly opened positions or positions that are completely sold out. Adding additional shares or reducing a position isn’t used in this calculation.
Here’s what we come up with:
Name | Turnover Percentage |
---|---|
FIRST PACIFIC ADVISORS, LLC | 0.0391 |
GLICKENHAUS & CO | 0.0461 |
DODGE & COX | 0.0575 |
HARRIS ASSOCIATES L P | 0.0661 |
RGM CAPITAL, LLC | 0.0667 |
FAIRFAX FINANCIAL HOLDINGS LTD/ CAN | 0.0698 |
MSD CAPITAL L P | 0.0833 |
BAUPOST GROUP LLC | 0.0870 |
TWEEDY BROWNE CO LLC | 0.0877 |
BERKSHIRE HATHAWAY INC | 0.0882 |
Name | Turnover Percentage |
---|---|
MATRIX CAPITAL MANAGEMENT COMPANY, LLC | 1.0909 |
BALYASNY ASSET MANAGEMENT LLC | 1.1134 |
HAYMAN CAPITAL MANAGEMENT, L.P. | 1.1667 |
BRIDGEWATER ASSOCIATES, LP | 1.1877 |
JHL CAPITAL GROUP LLC | 1.3333 |
ARGONAUT CAPITAL MANAGEMENT CORP | 1.3750 |
SOUND ENERGY PARTNERS, INC. | 1.5000 |
ARTIS CAPITAL MANAGEMENT, L.P. | 1.5288 |
CENTAURUS CAPITAL LP | 2.0000 |
SOROS FUND MANAGEMENT LLC | 2.7917 |
Now let’s plug these funds into the Guru Report to get a list of each groups highest conviction stock picks:
Stock | Ticker | Consensus: % of Filers holding this stock |
Stock represents over 5% of a Filer’s total holdings |
---|---|---|---|
WMT
|
70%
|
||
JNJ
|
70%
|
|
|
BK
|
60%
|
||
WFC
|
50%
|
|
|
USB
|
50%
|
|
|
PFE
|
50%
|
||
MSFT
|
50%
|
|
|
KFT
|
50%
|
||
COP
|
50%
|
|
|
TMK
|
40%
|
||
KO
|
40%
|
|
|
MCD
|
40%
|
||
IBM
|
40%
|
|
|
HPQ
|
40%
|
|
|
GSK
|
40%
|
||
GE
|
40%
|
||
XOM
|
40%
|
||
CMCSK
|
40%
|
||
BRK-A
|
40%
|
||
BRK-B
|
40%
|
Stock | Ticker | Consensus: % of Filer’s holding this stock |
Stock represents over 5% of Filer’s total holdings |
---|---|---|---|
AAPL
|
50%
|
|
|
YHOO
|
30%
|
||
WCG
|
30%
|
||
WFT
|
30%
|
|
|
WMT
|
30%
|
|
|
HD
|
30%
|
||
SPY
|
30%
|
|
|
SPY
|
30%
|
||
PFE
|
30%
|
||
LOW
|
30%
|
|
|
HFC
|
30%
|
|
|
HAL
|
30%
|
|
|
GOOG
|
30%
|
|
|
ESRX
|
30%
|
||
ELN
|
30%
|
||
CME
|
30%
|
||
CIEN
|
30%
|
||
AET
|
30%
|
||
ZMH
|
20%
|
||
WMB
|
20%
|
||
So you can see there is a big difference in investing mentality. The stable funds have a stronger conviction as to which stocks to own. Bellwethers like Wal-Mart and JnJ and dividend paying old tech like Microsoft, IBM and Hewlett Packard are their stocks of choice. The active funds have much less conviction in their picks. Non-dividend paying Apple, Yahoo, Google and Weatherford are all favorites, but there is much less consensus overall.
Now just for fun let’s plug those same groups into Backtester and backtest the performance for the past two years.
BackTester Report Summary for the Stable Funds
Overall Performance: | 40.58% |
S&P 500 Index Performance: | 22.68% |
BackTester Report Summary for Active Funds
Overall Performance: | (4.35)% |
S&P 500 Index Performance: | 22.68% |