Boston-based mutual fund company Pioneer Investment Management has $312 billion in assets under management, including $22 billion deployed in US equities. The firm was founded in 1928 by Philip L. Carret, and includes the Pioneer Fund, which is the third oldest mutual fund in the US. The Pioneer Fund is also often cited as the first mutual fund based on ethical values, as it uses a ‘sin screen’ to exclude investment in companies that were in the tobacco or alcohol business. Pioneer’s investment approach is based on uncovering value using an intrinsic valuation approach, based on fundamental and quantitative proprietary research.
Pioneer holds a diversified portfolio of 670 equity positions, 65% of that in large-caps, 30% in mid-caps and the remaining 5% in small-capitalization equities. Its portfolio turnover is just over 30%, implying an average holding period of about three years. Based on its most recent SEC 13-F filing for the June 2011 quarter, we determined that its portfolio is over-weight in the services sector (16%), and it is underweight basic materials (5%) and energy (11%) sectors, compared to the weighting of these sectors in the overall economy. The following summarizes the fund’s most significant picks and pans in the latest reported 13-F filing for the June 2011 quarter, updated based on any 13-G filings since the end of the quarter:
Pioneer cut $30 million from its $3.44 billion prior quarter position in the service sector, including cutting $67 million from its $100 million prior quarter position in CVS Caremark Corp. (NYSE:CVS), an operator of 7,182 pharmacy drug stores in 41 states and D.C.; and cutting $34 million from its $77 million prior quarter position in Moody Corporation (NYSE:MCO), a provider of credit ratings, research and analysis tools for institutional investors and capital market professionals.
Furthermore, it also added a new $33 million position in Kimco Realty Corp. (NYSE:KIM), a REIT that owns, manages and acquires neighborhood and community shopping centers in the US, Canada, Mexico and Puerto Rico. It added $32 million to its $3 million prior quarter position in Biomed Realty Trust Inc. (NYSE:BMR), a REIT that acquires, owns, leases and manages office and laboratory space for lease to life science tenants. It also added $38 million to its $1 million prior quarter position in eBay Inc. (NASDAQ:EBAY), a provider of online marketplaces and electronic payment services via ebay.com and paypal.com.
Basic Materials Sector
Pioneer cut $10 million from its $1 billion prior quarter position in the basic materials sector, including cutting $27 million from its $208 million prior quarter position in Freeport McMoran Copper & Gold (NYSE:FCX), engaged in the exploration and development of copper, gold, silver and molybdenum mines in Indonesia, North and South America. Furthermore, it added a new $62 million position in The Mosaic Company (NYSE:MOS), which is one of the world's leading producers and marketers of concentrated phosphate and potash crop nutrients for the global agriculture industry.
Pioneer added $90 million to its $3.15 billion prior quarter position in the technology sector, including adding a new $40 million position in Juniper Networks Inc. (NYSE:JNPR). JNPR is a provider of secure network infrastructure products and services that enable ISPs and telecommunications service providers to deploy services and applications, and meet the demands resulting from the rapid growth of the Internet. Pioneer also added $37 million to its $1 million prior quarter position in Symantec Corp. (NASDAQ:SYMC), a developer of internet and network security, storage and systems management applications for consumers and enterprises. And adding $30 million to its $13 million prior quarter position in Netapp Inc. (NASDAQ:NTAP), a manufacturer of integrated storage and data management hardware for corporations and government agencies.
Pioneer added $40 million to its $3.37 billion prior quarter position in the financial sector. This includes adding a new $89 million position in Discover Financial Services (NYSE:DFS), an issuer of credit cards, and a provider of payment processing services for credit and debit card transactions. Adding $67 million to its $1 million prior quarter position in Capital One Financial (NYSE:COF), a provider of consumer and commercial lending, credit card products and automobile financing. And adding $36 million to its $21 million prior quarter position in AFLAC Inc. (NYSE:AFL), a provider of health, accident, disability and life insurance in the U.S. and Japan.
Furthermore, it cut $54 million from its $102 million prior quarter position in global financial services firm Morgan Stanley (NYSE:MS); and it also holds one of its largest positions at $307 million in Chubb Corp. (NYSE:CB), a provider of property and casualty insurance.
Pioneer maintained its prior $2.44 billion position in the healthcare sector unchanged from the prior quarter. Within this sector, it added a new $34 million position in Watson Pharmaceuticals (WPI), a developer of generic and branded drugs including oral contraceptives, analgesics and smoking cessation aids. It added a new $33 million position in Zimmer Holdings Inc. (ZMH),a developer of orthopedic and dental reconstructive implants, trauma products and related surgical products. It added a new $29 million position in Tenet Healthcare Corp. (NYSE:THC), an operator of 49 general hospitals and a critical access hospital in urban and rural communities in eleven states. It added $34 million to its $58 million prior quarter position in UnitedHealth Group Inc. (NYSE:UNH), a provider of managed healthcare services through HMO and government contracts to over 75 million members in the US. Finally, it added $27 million to its $60 million prior quarter position in biotech company Amgen Inc. (NASDAQ:AMGN) that develops therapeutics based on cellular and molecular biology to treat anemia, cancer, and inflammatory diseases.
Furthermore, it also cut $69 million from its $143 million prior quarter position in Johnson & Johnson (NYSE:JNJ), a provider of healthcare products and related services to the consumer, pharmaceuticals and medical markets.
Pioneer cut $70 million from its $2.81 billion prior quarter position in the consumer sector, including cutting $67 million from its $86 million prior quarter position in non-alcoholic beverage provider Pepsico Inc. (NYSE:PEP). And cutting $58 million from its $59 million prior quarter position in cereal manufacturer Kellogg Company (NYSE:K).
Pioneer added $10 million to its $760 million prior quarter position in the transportation sector, including adding a new position in regional discount airline Southwest Airlines Co. (NYSE:LUV). Furthermore, at $321 million, it holds one of the largest positions in its portfolio in Norfolk Southern Corp. (NYSE:NSC), that via Norfolk Southern Railway operates a 20,000-mile railroad in 22 states and D.C.
Pioneer cut $90 million from its $780 million prior quarter position in the utility sector, including cutting $38 million from its $48 million prior quarter position in DPL Inc. (NYSE:DPL), a provider of electric utility services in west-central Ohio that was acquired by AES Corp. (NYSE:AES) in April.
click on image to enlarge
Credit: Historical fundamentals including operating metrics and stock ownership information were derived using SEC filings data, 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.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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 our ‘opinions’ and we may be wrong. We 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 our 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.