Fries and his team have a unique value approach to investing that includes three components:
- Basic value stocks: Consisting of about 46% of the portfolio, these are stocks of financially sound companies with solid businesses that sell at low valuations relative to a companies' net assets or earning power.
- Consistent earners: Making up 35% of the portfolio, these are growing companies that have steady earnings and dividend growth that are bought at a discount to their real value.
- Emerging franchises: These are value-priced emerging companies in the process of establishing a leading position. While riskier, this component provides the opportunity for faster growth.
On the growth front, Alex Motola, who manages the Thornburg Core Growth portfolio, has been in the five-star category in both the three- and five-year time periods. Kevin Baker of TheStreet.com Ratings
had this to say: "Thornburg Funds retained the top ranking. Impressively, all 17 of its rated funds rank in the top 30%." In fact, Thornburg had the top ranking among 71 fund families with between 10 and 39 rated funds.
The
(TIBAX Quote - Cramer on TIBAX - Stock Picks)Thornburg Investment Income Builder Fund (TIBAX) is a hybrid fund that helps anchor a portfolio for good and bad times. President and Chief Investment Officer Brian McMahon and Co-Portfolio Manager and Managing Director Brad Kinkelaar manage the equity part, currently about 75% of the fund. They only invest in dividend-paying stocks, with about 50% in foreign stocks. The fund pays close to a 3.82% dividend, which should provide a nice cushion in a down market.
Steve Bohlin was with Thornburg on the fixed income side for 22 years. When he retired earlier this year, Portfolio Manager and Managing Director Jason Brady took his place managing the
(THIFX Quote - Cramer on THIFX - Stock Picks)Thornburg Limited Term Income Fund (THIFX). Brady's past experience working with fixed income investments at
Fortis,
Fidelity and
Lehman Brothers should serve investors well. While this fund has not been tested in a bear market, I feel the value-driven philosophy of the managers along with this focus on quality dividends and bonds will help calm investors' fears. Obviously, there is risk, but in my opinion it's not like the couple of bucks you pay for a ride on a roller coaster.
As with any fund, it needs to be
thoughtfully positioned as a core holding in a portfolio to help control risk. Since you cannot control the market, you should focus on what you can control: the amount of risk in your portfolio. The main purpose of figuring out how much to allocate to a fund is to help have a tolerable risk threshold and still have a chance for some growth.
Vern Hayden
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