CONSUELO MACK: This week on WEALTHTRACK, two top ranked mutual fund managers carve their own trails to find value around the world in off the track places. Ariel Investments’ Rupal Bhansali and Brown Brothers Harriman’s Tim Hartch lead the way next on Consuelo Mack WEALTHTRACK.
Hello and welcome to this edition of WEALTHTRACK, I’m Consuelo Mack.
Warren Buffett is celebrating his 50th anniversary at the helm of Berkshire Hathaway this year. As a recent cover story in Barron’s pointed out he is still going strong at 85 and so is the company.
As he told shareholders at his most recent annual meeting: “First and definitely foremost, I believe that the chance of permanent capital loss for patient Berkshire shareholders is as low as can be found among single-company investments. That’s because per-share intrinsic business value is almost certain to advance over time.”
Well tell that to Wall Street. Berkshire Class A shares have been underperforming the S&P 500 recently as they have in occasional periods over the last 50 years. As Barron’s pointed out Berkshire can’t possibly replicate its’ 20 percent plus annualized performance over the last 50 years but it’s doing just fine. This week’s guests are both admirers of Warren Buffett. They both own Berkshire Hathaway in their portfolios. They both invest in quality companies selling below their intrinsic value. And in doing so they each buy businesses that are out of favor.
Rupal Bhansali is the Chief Investment Officer of International and Global equities for Ariel Investments. She is also Portfolio Manager for two mutual funds she launched at Ariel at the end of 2011. The five-star rated Ariel International Fund, which is in the top percentile of its Morningstar Foreign Large Value Category, with 12% annualized returns over the last 3 years and the four-star rated Ariel Global Fund whose double digit 3 year returns place it near the top decile of its World Stock Fund category.
Timothy Hartch is the Co-Manager of Brown Brothers Harriman’s Large Cap Core Select equity portfolios including the four-star rated BBH Core Select Mutual Fund which he has managed since 2005. Core Select is in the top 3% of its Large Blend Category over the last 10 years with 10% annualized returns. Although it’s impressive 3 and 5 year returns put it in the middle of its category peers. Hartch was nominated for Morningstar’s Domestic Stock Fund Manager of the year in 2012. He launched a BBH Global Core Select fund in 2013 which is still too new to be ranked by Morningstar. I began the interview by asking what being a value investor means to each of them.