by Bill Wysor | October 21, 2013 6:30 am
The world we live in spins at a fast clip, with many investors in mutual funds, ETFs and equities alike bombarded with information and ideas about how to profit in a speedy way. Most of the advertisements from brokerage firms put emphasis on trading — and not so much emphasis on investing.
But investors need to keep the big picture in mind, and taking a long-term view is what legendary money manager Mario Gabelli is all about.
Mr. Gabelli has more than 45 years of investing experience, and investing in one of his mutual funds means you are buying into a fundamental, disciplined approach to value investing.
Investing in these mutual funds also means you get a heavy dose of easy-to-understand businesses that have pricing power, solid balance sheets and strong management. You will not find much in the way of tech stocks or the latest hot name in biotechnology. Instead, you will find stocks in such industries as auto parts, beverages and media. As Mr. Gabelli recently stated on CNBC, “if you drink it — we follow it.”
While expense ratios are on the high side for all of these funds, the results over time have been very rewarding. So here are three no-load mutual funds from “Super Mario” that are open to new investors:
The Gabelli Value Fund (GVCAX) has a rather modest asset size of $713 million and tends to focus on large-cap names. Manager Mario Gabelli teams up with Chris Marangi on this mutual fund that seeks out classic undervalued firms that trade at a discount of what the managers calculate to be the true value of the stock.
GVCAX is up 25% YTD, but this is a long-term success story.
According to return numbers from Mr. Gabelli’s firm, a $10,000 investment in this fund back in 1989 grew to $120,328 through August of this year. A similar investment in the S&P 500 became $80,472 over the same period. GVCAX also has appreciated 8.5% annually over the past 10 years. This illustrates well how returns can compound over time to produce spectacular results.
GVCAX is heavy in consumer stocks, as well as industrials and communication companies. Current top holdings include Viacom (VIAB), CBS (CBS), Swedish Match (SWMAY), Honeywell International (HON) and Diageo (DEO).
Expenses for the fund are 1.42% annually, or $142 annually for every $10,000 invested, with turnover a mere 3% annually.
Considered the “flagship” of the family, the Gabelli Asset Fund (GABAX) has been a steady performer over time. The fund is up 24% YTD and has gained 9.8% annualized for the past 10 years, placing it in the top 2% of its large blend category, according to Morningstar.
Gabelli has been in charge of this mutual fund since it launched all the way back in 1986, but he currently has assistance from three other managers to handle GABAX’s $3.4 billion in assets.
About 81% of this fund is in U.S. stocks, with 18% in non-U.S. names. GABAX is most heavily weighted toward consumer stocks and industrials. Current top holdings include News Corp (NWSA), Deere & Co. (DE), Precision Castparts (PCP), Ametek (AME) and DirecTV (DTV).
GABAX charges 1.38% in expenses.
For those in search of mutual funds to gain exposure to small-cap names, the Gabelli Small Cap Growth Fund (GABSX) is an attractive option.
Mario Gabelli is listed as the sole manager on this small-blend mutual fund, which has assets of $3.2 billion. This fund has gained 27.5% YTD and is up an annualized 11.3% over the past 10 years. Turnover here is a modest 7% annually, which helps the fund be rather efficient for investors holding it in taxable accounts.
Current top holdings include O’Reilly Automotive (ORLY), RPC (RES), Karmon (KAMN), Circor International (CIR) and Interpublic Group of Companies (IPG). Much like GABAX, Gabelli Small Cap Growth leans heavily toward consumer and industrial stocks.
GABSX has an annual expense ratio of 1.41%.
As of this writing, Bill Wysor was long GABAX.
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