Auxier Focus Fund

Fund Overview

The Auxier Focus Fund is a quiet nonconformist that deviates from its peers with a broad mix of assets and a style that staunchly relies on Warren Buffett-style investing for the long term.

As of April 04, 2012, the fund has assets totaling almost $248.06 million invested in 176 different holdings. Its portfolio consists mostly of U.S. stocks.

The fund's manager, Jeff Auxier, doesn't follow the whims of market fads. He's a bona fide bargain hunter who seeks out undervalued companies with improving fundamentals and a strong track record. "We're old-fashioned business analysts and stock pickers," Auxier says. "We know what we want ahead of time and buy when things are hopelessly out of favor." 

While most of the fund's large-value peers primarily hold stocks, Auxier isn't afraid to dabble in the corporate bond market and would rather keep cash on hand than invest in a less-than-ideal prospect. Although it's grouped with large-value funds, the Auxier Focus Fund most closely resembles a multicap fund with a "go-anywhere" approach. Most funds in its class stick to large- or giant-cap funds, but Auxier branches out into midcap stocks, small-cap stocks and even bonds.

Auxier also identifies China's increasing appetite for consumer goods such as skin-care products, cosmetics, and fragrances as a lucrative emerging market niche where the fund can target low-cost necessity products with steady demand. The fund will be looking to invest in multinational companies with large global footprints to meet that goal. "We typically try to buy and watch for years," Auxier says. The fund has returned 5.71 percent over the past year and 18.18 percent over the past three years.
 
Historically, the fund has held up during tough economic times and posted solid results in more favorable markets as well, again outperforming other typical large-value funds. "The goal is really to protect in the bad markets and match in the good markets," Auxier says. The fund has returned 3.93 percent over the past five years and 6.29 percent over the past decade.

Investment Strategy

Auxier seeks to offer growth opportunities to investors at a reasonable price by focusing on well-managed, attractively-priced companies with solid track records and strong balance sheets. According to its website, an ideal investment for the fund is a "high quality, high return business with exceptional management, selling at wash-out, bargain prices." 

Morningstar lumps Auxier in with large-value mutual funds but says it varies from its peers in several aspects, most notably its above-average holdings in the service and manufacturing sectors.

While the fund focuses on stocks, it doesn't neglect worthwhile short- and long- term bond investments and consistently holds a significant amount of cash.

Role in Portfolio

Morningstar calls this fund a "supporting player."

Fund Opinion

This fund received the Silver award for the Multi Cap Domestic Equity category in Standard & Poor’s 2010 Mutual Fund Excellence Awards. 

Standard & Poor's 2010-11-01

Management

Jeff Auxier, president and CEO of Auxier Asset Management, has managed the fund since its 1999 inception and relies on extensive daily research to maintain consistent performance. "We are 90% research, 10% trading. Most investors work the opposite," Auxier says on his company's website. And if you're into fund managers who have a stake in the funds they manage, Jeff Auxier is the guy for you. According to his company's website, he invests his entire personal retirement in the Auxier Focus fund. "The big part of this is the leverage involved in other people's money," Auxier says. "If your own money is on the line you think a little different. You approach things much more businesslike." Prior to founding his own company in 1998 and launching the fund in 1999, Auxier managed accounts for high net-worth investors as a broker at Smith Barney.

Performance

The fund has returned 5.71 percent over the past year, 18.18 percent over the past three years, 3.93 percent over the past five years, and 6.29 percent over the past decade.

Hypothetical Growth of $10,000

Updated 03.31.2012

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Holdings

The fund usually keeps 70 to 80 percent of its holdings in stock, rounding out the remainder of its portfolio in short- and long-term bonds and cash assets. Contrary to its large-value peers, Auxier tends to invest more in the consumer goods and services industries, such as beverages, tobacco, and supermarkets, and less in the healthcare, financial services, and energy sectors. The majority of the fund's holdings are in U.S. stocks and bonds, with about 12 percent invested abroad, mostly in U.K.-based firms.

Asset Allocation

	% Long	% Net
Cash	24.33	24.33
Stocks	59.41	59.41
Bonds	6.64	6.64
Other	0.15	0.15
Foreign Bonds	0.69	0.69
Foreign Stocks	8.77	8.77
Convertible	0.0	0.0
Preferred	0.0	0.0

Updated 12.31.2011

Top Holdings

Performance as of 03.31.2012

Portfolio as of 12.31.2011

	Ticker	YTD Return %	% Net Assets
Philip Morris International, Inc.	PM	14.87	2.43
Molson Coors Brewing Company	TAP	5.6	2.42
PepsiCo Inc	PEP	1.36	2.41
Merck & Co Inc	MRK	3.26	2.19
Microsoft Corporation	MSFT	25.15	1.89

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Fees

Auxier Focus Fund has an expense ratio of 1.25 percent.

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Risk

Investors bet on the success of Jeff Auxier's management style, most notably his willingness to build and maintain atypical sector weights and invest in bonds. Because of its significant bond, value stock, and cash holdings, this fund tends to post solid rather than strong results in big stock market rallies.

Though the fund reduced its fees in early 2010, it remains pricey in comparison to other funds in its class.

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