This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

A New Mutual Fund for Rough Markets

NEW YORK ( TheStreet) -- BBH Core Select (BBTEX) is one of the most impressive mutual funds of recent years. During the past decade, the fund, which is operated by Brown Brothers Harriman, returned 10.5% annually, outdoing the S&P 500 by 4 percentage points, according to Morningstar.

Besides delivering exceptional returns, this mutual fund was one of the least volatile members of the large blend category as measured by an indicator called standard deviation.

BBH's most outstanding performance came in the turmoil of 2008 when the fund topped the S&P 500 by 15 percentage points and ranked as the top performer in its group.

The compelling results did not go unnoticed. With investors rushing to buy shares, the fund grew from $170 million in assets in 2008 to more than $5 billion now. The flood of assets was particularly notable because it came at a time when many actively managed stock funds were suffering big outflows.


To avoid becoming bloated, BBH Core closed to new investors last year. But you can still gain access to the winning strategy by buying a sister fund, BBH Global Core Select (BBGNX), which began operating recently. The two BBH portfolios resemble each other in many respects. The funds hold some of the same stocks, and Tim Hartch is co-portfolio manager of both funds. He says that the funds search for similar businesses, high-quality operators selling at discounts.

To be sure, the funds are not identical. The flagship Core Select focuses on the U.S., typically keeping 10% to 20% of assets in foreign names. While the Global Core Select holds U.S. names, it can keep most assets abroad.

Can the BBH managers excel in the next decade the way they performed in the past? Maybe not. The company's strategy was ideally suited for the rough markets of recent years. The approach has often trailed in roaring bull markets. Still, the BBH funds could be appealing because of their tendency to deliver steady results in up and down markets.

The portfolio managers limit risk by seeking leading businesses that sell essential products to loyal customers. The managers prefer stocks with high returns on capital and strong balance sheets. Such blue chips are not hard to find. But what has distinguished the BBH managers is their ability to buy stars at modest multiples.


1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
AAPL $124.75 0.00%
FB $80.78 0.00%
GOOG $524.05 0.00%
TSLA $206.79 0.00%
YHOO $44.45 0.00%

Markets

DOW 17,826.30 -279.47 -1.54%
S&P 500 2,081.18 -23.81 -1.13%
NASDAQ 4,931.8150 -75.9760 -1.52%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs