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Chicago-based Mutual Fund Bruce Fund, Inc., headed by Guru Robert B. Bruce and co-managed with his son R. Jeffrey Bruce, manages $294 million of which $168 million is invested in equities and the remaining in bonds and cash. Per Morningstar, the fund is ranked in the top 1% in its category for each of the last one, three and ten year periods. And over the last ten years, the fund has generated 17.9% annualized return, thereby significantly outperforming the comparable -0.96% return generated by the S&P 500.

The figure below, taken from Bruce Funds' prospectus, illustrates the returns over the last 10 years ending 2009; the fund's return in 2010 was 27.7%, and its portfolio return is 9% year-to-date.

Click to enlarge:


The fund holds concentrated positions, invested in only 36 equity positions, with more than a quarter of its equity holdings in the healthcare sector. Furthermore, its portfolio turnover is between 10%-15%, implying a holding period approaching eight to ten years. Lastly, almost two-thirds of the fund's equity holdings are in small-capitalization equities, including approximately 40% in micro-cap and nano-cap equities.

The following summarizes Bruce Funds' new picks and pans in the latest reported 13-F filing for the March 2011 quarter:

  • Initiated only one new position in the quarter, in C&D Technologies Inc. (OTC:CHHPD), buying 1.66 million shares valued at $13.8 million. C&D is a pink-sheet traded micro-cap company under-going financial restructuring since reaching an agreement with a group of its major note-holders in September of 2010. The company with $354.8 million in revenue for the most recent fiscal year ended January 2011 is engaged in the manufacture, marketing, and distribution of electrical power storage systems for the standby power market in the U.S. and internationally. Its markets include telecommunications, uninterruptible power supply, military, cable, utilities, nuclear power plant, pipeline, oil and gas, and other process industries. The $13.8 million new buy in the last quarter represents a high conviction buy as at 11.6% of its equity holdings, it represents one of its largest holdings, and also the 1.66 million shares are 15.2% of the total outstanding shares of C&D.

  • Added to only one position in the quarter, in Abbott Laboratories (NYSE:ABT), adding $4.9 million to its previous $3.9 million position. Abbott develops pharmaceuticals, diagnostic systems, nutritional supplements and vascular, ophthalmic and eye-care products. Its $8.8 million position is the 4th largest in its portfolio, and represents another conviction buy for the fund.

  • Bruce Funds sold half its position in Alanco Technologies Inc. (OTCQB:ALAN), a provider of wireless cellular and GPS tracking, monitoring and control services offered on a monthly subscription basis. With Alanco shares trading at all-time lows and almost in the penny-zone, this represents a high-conviction sell for the fund.

The following Table summarizes Bruce Funds' largest holdings as of its latest filing for the March 2011 quarter (including any Schedule 13D filings since the end of the quarter):

  • Amerco (NASDAQ:UHAL) provides truck, trailer and self-storage room rentals for do-it-yourself moving and storage in U.S. and Canada.

  • Omega Protein Corp. (NYSE:OME) manufactures fish meal and fish oil products used in animal feed, food products and dietary supplements.

  • Titan International Inc. (NYSE:TWI) manufactures off-highway wheels, tires and assembly products for agriculture, earth-moving, construction and consumer markets.

  • Pfizer Inc. (NYSE:PFE) develops branded prescription drugs for cardiovascular and metabolic diseases and other conditions.

  • Nextera Energy Inc. (NYSE:NEE) is engaged in the generation, transmission, distribution and sale of electricity to 4.5 million customer accounts in Florida.

  • Flotek Industries Inc. (NYSE:FTK) provides oilfield chemicals, logistics and down-hole drilling and production equipment to the oil and gas industry.

  • Allstate Corp. (NYSE:ALL) offers personal property, casualty and life insurance and retirement and other investment products, mainly in the U.S.

  • Kinross Gold Corp. (NYSE:KGC) is a Canadian company engaged in mining and processing gold, silver and copper in the U.S., Brazil, Ecuador, Chile and Russia.

In addition, the company’s largest position at the end of the March 2011 quarter was in America Service Group (NASDAQ:ASGR), a managed healthcare services provider to correctional facilities, which is currently under acquisition by privately held Valitas Health Services of St. Louis, MO.

Table

Company

Ticker

New or Increased or Decreased or Unchanged Position

Market Value

Amerco

UHAL

Unchanged

$ 15.7 million

C&D Technologies Inc.

OTC:CHHPD

New

$ 13.8 million

Abbott Laboratories

ABT

Increased

$ 8.8 million

Omega Protein Corp.

OME

Unchanged

$ 8.6 million

Titan International Inc.

TWI

Unchanged

$ 8.0 million

Pfizer Inc.

PFE

Unchanged

$ 6.7 million

Nextera Energy Inc.

NEE

Unchanged

$ 5.7 million

Flotek Industries Inc.

FTK

Unchanged

$ 5.7 million

Allstate Corp.

ALL

Unchanged

$ 5.5 million

Kinross Gold Corp.

KGC

Unchanged

$ 5.4 million


Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Credit: Historical fundamentals including operating metrics and stock ownership information were derived using I-Metrix® by Edgar Online®, Zacks Investment Research, Thomson Reuters and Briefing.com. The information and data is believed to be accurate, but no guarantees or representations are made.

Disclaimer: Material presented here is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock you should do your own research and reach your own conclusion. Further, these are my ‘opinions’ and I may be wrong. I may have positions in securities mentioned in this article. You should take this into consideration before acting on any advice given in this article. If this makes you uncomfortable, then do not listen to my thoughts and opinions. The contents of this article do not take into consideration your individual investment objectives so consult with your own financial adviser before making an investment decision. Investing includes certain risks including loss of principal.

Source: Top Picks of Guru Robert Bruce's Mutual Fund