Those inspired by Warren Buffett’s value investing sucess might consider the First Eagle Global Fund (SGENX), which has returned more than 12% annually since 1979, CNBC reports.
Founded in 1970 and with nearly $47 billion in assets, the fund reflects the teachings of a Buffett mentor, economist Benjamin Graham — disciplined investing, liquidity and diversification.
That 12%, 44-year performance track record even takes into consideration the fund's costly 5% load fee charged on the first $25,000 invested and its annual 1.11% expense ratio.
A mere $10,000 investment in First Eagle Global in 1979 would have been worth $1.62 million at the end of 2022, minus sales charges. That’s more than three times the return of the MSCI World Index, according to the asset management firm.
Year to date, First Eagle Global is up 4%, and even during the market turbulence of last year, it was down just 6%.
The fund’s investment method is based on three principles.
First, “to us, survival and persistence is really the key question,” says Kimball Brooker, manager of the fund since 2009. “That’s our view of quality.”
The second precept is selecting stocks offering margins of safety and are trading at a discount. “What is interesting is that this discount that international markets trade at relative to U.S. markets is very wide,” Brooker says.
The final and third discipline guiding the fund is to steer clear of stocks with poor management or unethical behavior.
The fund’s investments are evenly divided between U.S. and international stocks. It also holds a significant amount of cash, 7.5% currently.
“It’s our default position,” Brooker says. “When we’re not able to find things that make sense to us, that meet our underwriting criteria, we’ll wait in cash,” the portfolio manager says. “We don’t want to force the money to be put to work into things that don’t fit.”
True to form, First Eagle Global Fund has invested in Buffett’s Berkshire Hathaway for decades. Its holdings also overlap with some of Berkshire’s holdings, including American Express, Taiwan Semiconductor and Bank of New York Mellon.
“It’s probably not too surprising that like-minded investors often end up in some of the same places,” Brooker says.
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