Matt Koppenheffer of the Motley Fool reported his interest in Chris Davis of Davis Funds.
The "why" here is very simple: Davis is a value-obsessed investor who buys stocks to own, rather than flip. The turnover in the Davis funds reflects this approach, as the funds' turnover implies an average five-year holding period. And insiders at Davis don't just talk the talk -- at the end of last year, they had more than $2 billion of their own money invested in the Davis funds.
With that in mind, here are a handful of the stocks that saw buying activity from Davis Funds during the first quarter.
- Ace Limited (NYSE:ACE)
- Air Products and Chemicals, Inc. (NYSE:APD)
- Kraft (KFT)
- Expedia (NASDAQ:EXPE)
- Everest Re Group Ltd. (NYSE:RE)
Given that these are stocks that are being selected for the long term, this should be of interest to us looking to build a long term investment portfolio
We entered these funds into our system and then compared it with a balanced portfolio of dividend producing ETFs.
|Asset||Fund in this portfolio|
|REAL ESTATE||ICF (iShares Cohen & Steers Realty Majors)|
|FIXED INCOME||TIP (iShares Barclays TIPS Bond)|
|Emerging Market||VWO (Vanguard Emerging Markets Stock ETF)|
|US EQUITY||DVY (iShares Dow Jones Select Dividend Index)|
|US EQUITY||VIG (Vanguard Dividend Appreciation ETF)|
|INTERNATIONAL EQUITY||IDV (iShares Dow Jones Intl Select Div Idx)|
|High Yield Bond||HYG (iShares iBoxx $ High Yield Corporate Bd)|
|INTERNATIONAL BONDS||EMB (iShares JPMorgan USD Emerg Markets Bond)|
- 5 Stocks This Hotshot Pro Bought -- Total of $10K invested equally in each stock
- Retirement Income ETFs Tactical Asset Allocation Moderate -- Above funds using TAA (40% fixed income, 30% for each of the top two asset classes)
- Retirement Income ETFs Strategic Asset Allocation Moderate -- Above funds using SAA (40% fixed income, 12% for each of the five asset classes -- funds selected based on price momentum)
|Portfolio/Fund Name||1Yr AR||1Yr Sharpe||3Yr AR||3Yr Sharpe||5Yr AR||5Yr Sharpe|
|5 Stocks This Hotshot Pro Bought||33%||214%||5%||14%||8%||24%|
|Retirement Income ETFs Strategic Asset Allocation Moderate||20%||208%||3%||14%||6%||25%|
|Retirement Income ETFs Tactical Asset Allocation Moderate||14%||152%||9%||71%||11%||72%|
The more detailed analysis and graphs show the volatility of the stock portfolio which has performed in a similar manner to the SAA benchmark.
This is a fair selection of stocks to hold for the longer term, however, it is outperformed by a number of other portfolios such as 10 Dividend Stocks From SeekingAlpha Readers
Disclosure: MyPlanIQ does not have any business relationship with the company or companies mentioned in this article. It does not set up their retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical.