GoodHaven Fund Beats Market After Strategy Shift to Conviction Stock Picks
• The GoodHaven Fund underperformed the market for years but has outperformed since late 2019 after changing its investment strategy to pay less attention to macroeconomics and have more concentration and conviction in stock picks.
• The fund now focuses on high return-on-capital companies with strong growth trajectories before they are widely recognized.
• Big winners recently have been homebuilders like Lennar and Builders FirstSource as well as Bank of America. The fund has stuck with winners like Alphabet since 2011.
• The fund has about $340 million in assets under management and its top 10 holdings make up 52% of the portfolio.
• At the end of November 2022, the fund had 29% in cash and short-term investments to maintain flexibility for attractive purchases and meet potential redemptions.