Wallace Weitz published his first quarter 2011 letter to shareholders. For the quarter, his funds delivered solid gain, leading by Weitz Partners III Fund, which went up 8.5%. The flagship Weitz Value Fund, however, returned 5.7%, legging benchmark S&P 500’s 5.9% for the quarter. Weitz contributes the difference in performance among the funds to the market caps that the funds are focusing on:
Smaller company stocks continued to lead the recovery from the bear market lows, and the effect of that leadership is evident in the recent returns of our Funds. The Value Fund, which focuses on large- and mega-capitalization stocks, has kept pace with the S&P 500 (very large companies), but has trailed our other Funds that can own smaller companies. Partners Value and Partners III are “go-anywhere” or “all-cap” funds and their performance has been helped by their small- and mid-cap holdings. Hickory, which holds only small and medium-sized companies, has had the best numbers latelyHe repeated his bullish view towards the large, high-quality companies:
The popularity of various market sectors tends to rotate, and some of the cheapest stocks available in today’s market appear to be those of very large, high-quality companies, so we have no doubt that the Value Fund will eventually have its turn in the spotlight.The letter contains good discussions of the recent world events on his investing, even though his typically focuses on business value of individual companies.
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