That definition has led him to companies such Harrah’s Entertainment, a Las Vegas casino operator, Mattel, the maker of Barbie dolls, and Omnicom, an advertising group and currently the largest holding in the fund as of the latest reported portfolio from May 30th.
The fund currently falls in the large cap blend area of the Morningstar Style Box and the portfolio has about 80 holdings. Mr Greenberg does, however, put about 40% of t
he money in the top ten holdings making this fund a fairly concentrated offering. He generally looks for undervalued, high-growth businesses that are linked to consumers’ disposable income.
As of the latest portfolio, about 80% of assets are invested in America, mainly in companies dependent on consumer spending. A slowdown in this area is likely to hit the fund.
Because it is a sector fund it is also more risky than funds investing in a broader set of companies. It may therefore be a difficult fit for many investors’ portfolios as there are likely to be overlaps with broader funds. Also UK investors will be exposed to currency risk as this offshore fund is denominated in dollars.
Investors should be aware that the fund’s excellent historical performance record was boosted by a 71.8% return in 1999. [All returns are in sterling.] But even if this single year may put the fund in a particularly favourable light it should be noted that the fund managed to hold up well in both 2000 and 2001. The fund had a rough time last year, falling close to 25.3%. This year the fund was up by 10.2% as of June 30th.
Mr Greenberg has done well in this niche of the market but the fund’s investors are betting on the long-term health of the leisure sector. The fund is likely to fall behind when overall consumer spending falls.
