Mario Gabelli manages Gabelli Equity Income fund (GABEX). Gabelli is a well known stock picker who likes out of favor stocks that have substantial 'private market values.' He does not use price earnings ratios alone and cares more about a company's underlying business and cash flow.
As a result, GABEX has been doing well. The following are the top holdings of the fund:
| Company | Symbol | % Assets |
|---|---|---|
| Swedish Match AB | SWMA.PK | 2.33 |
| Coca-Cola Company (The) Common | KO | 1.98 |
| Kraft Foods Inc. Common Stock | KFT | 1.94 |
| International Business Machines | IBM | 1.90 |
| Genuine Parts Company Common St | GPC | 1.52 |
| Boeing Company (The) Common Sto | BA | 1.42 |
| Pfizer, Inc. Common Stock | PFE | 1.24 |
| Johnson & Johnson Common Stock | JNJ | 1.16 |
| Deere & Company Common Stock | DE | 1.15 |
| Newmont Mining Corporation (Hol | NEM | 1.13 |
Most stocks are in consumer defensive (staples) sector:
| Sector Weightings (%) |
|---|
| Sector | GABEX | Category Avg | ||
|---|---|---|---|---|
| Basic materials | 5.20 | 1.59 | ||
| Consumer cyclical | 8.06 | 6.17 | ||
| Financial services | 10.68 | 17.92 | ||
| Realestate | 0.37 | 0.25 | ||
| Consumer defensive | 24.68 | 15.01 | ||
| Healthcare | 12.33 | 12.90 | ||
| Utilities | 4.95 | 6.12 | ||
| Communication services | 5.68 | 5.72 | ||
| Energy | 9.64 | 12.45 | ||
| Industrials | 12.74 | 13.09 | ||
| Technology | 5.67 | 8.79 |
It is interesting to see that the fund has Newmont Mining (NEM) as one of its top holdings. Newmont Mining is one of the largest gold miners. Recently, many precious metal miners have had good business, thanks to the gold and silver price strength (though, gold just had a big correction recently).
The following compares the fund's performance with two diversified asset allocation portfolios using dividend ETFs:
Portfolio Performance Comparison
| Portfolio/Fund Name | 1Yr AR | 1Yr Sharpe | 3Yr AR | 3Yr Sharpe | 5Yr AR | 5Yr Sharpe |
|---|---|---|---|---|---|---|
| Retirement Income ETFs Strategic Asset Allocation Risk Profile 0 | -5% | -7% | 18% | 74% | 0% | -1% |
| GABEX | 3% | 52% | 18% | 63% | 1% | 8% |
| Retirement Income ETFs Tactical Asset Allocation Risk Profile 0 | -2% | -13% | 13% | 64% | 10% | 44% |
Three-Year Chart - (click to expand)
It is impressive that the fund out performed the diversified ETF strategic allocation portfolio in the last 1 and 5 years. This does illustrate the extra alpha due to Gabelli's stock picking skills.
The nine dividend stocks from Gabelli Equity Income can serve as candidates for dividend and income investors.
Additional Disclosure: We do not have any business relationship with the company or companies mentioned in this article. It does not set up retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
