Bill Nygren has been with Oakmark since 1983 and was named Morningstar’s Domestic Stock Manager of the Year for 2001. As a value-oriented firm, Oakmark seeks stocks that are selling at a substantial discount to their underlying business value, and sells holdings when the price rises to meet the value. As of the start of the year, Oakmark Fund has $9.7 billion in assets under management, and Oakmark Select Fund has $3.8 billion.
In the second quarter, Nygren’s Oakmark Fund beat the S&P 5% to 3%, and in the first half returned 15% compared to the index’s 14%. Over the longer-term – where his focus really lies – he has returned 8.13% in 10 years and 11.9% in five years.
Bill added three new stocks to the fund in the second quarter as well: Apache Corp. (NYSE:APA), General Motors (NYSE:GM) and National Oilwell Varco (NYSE:NOV). He also added to his Apple (NASDAQ:AAPL).
His top holdings are Bank of America (NYSE:BAC), American International Group (NYSE:AIG), Capital One Financial Corp. (NYSE:COF), JPMorgan Chase & Co. (NYSE:JPM) and DirecTV (NASDAQ:DTV).
See his entire long portfolio here.
In his second quarter market commentary, Nygren talked at length about the bond market. Though the Fed’s decision to reduce its bond-buying activity caused bond prices to decline, Nygren said, he it did not change his opinion that equities are undervalued. From the letter:
“The bond market took quite a hit last quarter, but it would require another big hit before it would potentially lower our estimate of equity values. Rather than panicking about higher interest rates, we are encouraged that investors, rather than traders, are again buying bonds. And as investors regain control of the bond market, we wouldn’t be surprised to see rates continue to rise somewhat. Actually, for some of our stocks – especially the financials – we expect that their earnings will also increase as rates rise. So, we continue to believe that equities are attractively priced relative to both their own long-term history and to the opportunities available in the bond market.”
Don’t forget to add your investing questions for Bill in the comments box below. We look forward to reading them!