Yacktman Fund

Class S (YACKX)
Scorecard
5 / 5 Stars
Lipper
5 3 5 4 2
Zacks Investment Research
1 (Strong Buy)
Standard & Poor's
4 / 5 Stars
TheStreet.com
B- (Buy)

#23 in Large Blend

U.S. News evaluated 492 Large Blend Funds. Our list highlights the top-rated funds for long-term investors based on the ratings of leading fund industry researchers.

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Performance

The fund has returned 14.95 percent over the past year, 13.32 percent over the past three years, 24.53 percent over the past five years, and 10.27 percent over the past decade. 

Trailing Returns Updated 03.31.2014
Year to date 0.8%
1 Year 14.9%
3 Years (Annualized) 13.3%
5 Years (Annualized) 24.5%
10 Years (Annualized) 10.3%

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Summary

The story of the Yacktman Fund is one of its manager's journey from riches to rags--and then back to riches. 

As of April 22, 2014, the fund has assets totaling almost $13.72 billion invested in 45 different holdings. Its portfolio consists primarily of large-cap stocks.

Amid a number of sharp setbacks in the '90s, Don Yacktman, this fund's primary manager, tested the faith of his investors. But those who stuck with him have been rewarded handsomely. That's largely thanks to his unique breed of value investing, which has worked quite well as of late.

Essentially, Yacktman thinks of stocks much in the same way that others think of bonds: as investments that should, regardless of the climate, provide steady, predictable appreciation. While this seems incompatible with the risks of the stock market, Yacktman's preference for high-quality, attractively valued picks with consistent earnings and cash flow has led him to trounce the competition. Lately, Yacktman's approach has given him a sweet spot for soft drinks: At the end of September 2010, he had almost 8 percent of the fund's portfolio invested in Pepsi and 7 percent in Coke. The fund has returned 14.95 percent over the past year and 13.32 percent over the past three years. 

Over the course of its history, this fund has had its fair share of highs and lows. For instance, in 1991, Don Yacktman, after making a name for himself by running the Selected American Shares mutual fund, was named portfolio manager of the year by Morningstar. He launched the Yacktman Fund the next year. But by the late '90s, even his own board of directors thought he'd lost his touch, and amidst terrible performance, they tried to unseat him as manager. But the 2000s have been a different story. Notably, as of mid-September, the fund's returns for the trailing 10 years landed it in the top percentile of Morningstar's large value category. For Yacktman, who prides himself on having the discipline to stay tough for the long haul, this is the true measure of the fund's success. "Most people unfortunately have a 10-hour, 10-day, 10-week, or 10-month time frame. And that's part of the problem in this business. The 10-year time frame is the one that I look at," he says. The fund has returned 24.53 percent over the past five years and 10.27 percent over the past decade. 

Investment Strategy

Yacktman runs a concentrated portfolio. As of September 2010, for instance, he owned shares of just 43 companies. "Beyond a certain point," he says, "the more diversification, the more likely one will get mediocre returns." Yacktman is a disciplined investor, and when opportunities are scarce, he isn't averse to building up a large cash stake. "When we feel that we've filled up on the really good ideas ... we'd just as soon sit on some cash. If the opportunities are there, we'll buy things. It's just a matter of if they aren't attractive enough, we'd rather just sit on some [cash]," he says.  

Role in Portfolio

Morningstar calls the fund a "core" holding.

Management

Don Yacktman is the main portfolio manager. His son became a comanager in 2002. Jason Subotky also helps run the fund.

Fees

Yacktman Fund has an expense ratio of 0.74 percent. 

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Risk

Like all stock funds, this one comes with some risks.

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Fund Opinions

The fund's Value Line Overall Rank, a measure of risk-adjusted performance and relative growth in fund returns, is 2 on a scale of 1 to 5, with 1 being the best and 5 the worst.

Value Line 2014-04-10

The fund's Value Line Growth Persistence rank, which awards funds that consistently outperform their broad universes, is 4 for one year, 2 for five years, and 2 for 10 years. Scores are on a 1 to 5 scale, with 1 being the best and 5 the worst.

Value Line 2014-04-10

The fund's Value Line Risk Rank, a measure of volatility, is 2 on a scale of 1 to 5, with 1 being the least volatile and 5 the most.

Value Line 2014-04-10

Don Yacktman was Morningstar's manager of the year in 1991. Last year he was named as a finalist for Morningstar's domestic equity manager of the decade award.

2010-09-25

Don Yacktman was Morningstar's manager of the year in 1991. Last year he was named as a finalist for Morningstar's domestic equity manager of the decade award.

2010-09-25