No. 1 Investor Buys RIM, News Corp., Cisco
BOSTON (TheStreet) -- The Yacktman Fund's (YACKX) Donald Yacktman, the mutual-fund manager with the best record in the past 10 years, has boosted his holdings in out-of-favor stocks, including scandal-plagued media giant News Corp. (NWSA) and troubled computer-networking bellwether Cisco Systems (CSCO).
The manager of the $5.4 billion fund also initiated a big position in Research In Motion (RIMM), maker of the beleaguered BlackBerry smartphone, and added to a stake in Hewlett-Packard (HPQ), both of which have seen their shares slide this year. Yacktman made the changes in the second quarter, according to information from Morningstar and Bloomberg.
In addition to stocks, the Yacktman Fund bought a boatload of U.S. Treasury bills despite the volatility that swirled around the sector in the run-up to the debt-ceiling debacle, which threatened to cause their devaluation. President Barack Obama signed a debt-limit compromise yesterday, the day the U.S. would have failed in its ability to pay all of its obligations, such as Social Security and personnel salaries.
|Donald Yacktman, manager of the top-ranked Yacktman Fund.|
The Yacktman Fund has risen 4.9% this year while the benchmark S&P 500 Index is little changed. Over five years, the mutual fund has risen an annual average of 10%, more than five times the pace of the S&P 500. That makes it the No. 1 mutual fund, a distinction it also holds over three, 10 and 15 years. But the Yacktman Fund doesn't only protect investors from market downturns -- it rockets in bull markets. In 2009, as the S&P 500 Index jumped 26%, the fund rose a staggering 59%.That's why investors have added more than $2.4 billion to the fund in the past year. Donald Yacktman started the fund in 1992 and his management team now includes his son Stephen Yacktman and Jason Subotky. The Yacktman Fund gets a "buy" rating and a five-star grade from TheStreet Ratings, which indicates the fund has an excellent track record for maximizing performance while minimizing risk. It won TheStreet's 2011 Best Mutual Fund award for the large-cap core category. The fund currently holds 38 stocks and 53% of its assets are concentrated in its top 10 holdings. It also has 16 Treasury bond holdings of varying sizes. There is a slim 10% annual portfolio turnover, indicative of a buy-and-hold strategy. The fund's largest sector weighting is consumer services, at 30% of the portfolio, followed by consumer goods, at 28%. The fund sold out its 1 million share stake of personal-computer maker Dell (DELL) in the period. Its shares are up 20% this year. Here are five of the fund's big buys of out-of-favor stocks during the second quarter:
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