David Winters's Wintergreen fund finished 2006 with a 20.1% return. They have taken little risk in accomplishing attractive returns. Wintergreen Fund also grew from $54.7 million to more than $596 million.
David Winters: "One of the first things to keep in mind with Wintergreen Fund is that it is intended to be the antithesis of an index fund. We embrace the flexibility of our investment mandate and search globally for compelling assets which can be acquired at meaningful discounts. This approach gives us the ability to be agnostic with respect to geography, market capitalization, sector, and security type. Wintergreen does not have narrow index-related investment restrictions that are common with many mutual funds (whether written or unwritten); however, we do measure the risk of our investments in several ways. "
"Wintergreen approaches each investment decision much like insurance underwriters view their decisions on what risks to take. Wintergreen likes solid long-term upside potential with minimal downside risk. We anticipate ‘quotation risk’ which is simply an acknowledgement that the market will have swings in security trading prices that do not reflect any change in the underlying investment. These often inexplicable market movements are frequently good news for Wintergreen, for they create the opportunity for the Fund to acquire additional securities at attractive prices."
"Wintergreen focuses on the economics of the underlying businesses of our portfolio holdings. This analysis includes many securities that are outside of any index. For this reason, our Fund does not fit easily within the investment grids that are a popular asset allocation tool. The investment grids are frequently referenced to illustrate how closely many fund’s performance and risk track a particular index. Hedge funds are an investment opportunity for many investors who want something other than an index or index-like fund. The problem for these investors is that hedge funds are generally structured with an annual advisory fee (2% of assets plus 20% of the annual profits) that encourages greater risk through the use of leverage and/or frenzied portfolio trading that is generally inconsistent with long-term global value investing. This is not to say that index funds or hedge funds are bad ideas. Wintergreen Fund is very different and has been described as an alternative to both the standard index hugging fund and the standard high fee alternative investment."
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David Winters: "One of the first things to keep in mind with Wintergreen Fund is that it is intended to be the antithesis of an index fund. We embrace the flexibility of our investment mandate and search globally for compelling assets which can be acquired at meaningful discounts. This approach gives us the ability to be agnostic with respect to geography, market capitalization, sector, and security type. Wintergreen does not have narrow index-related investment restrictions that are common with many mutual funds (whether written or unwritten); however, we do measure the risk of our investments in several ways. "
"Wintergreen approaches each investment decision much like insurance underwriters view their decisions on what risks to take. Wintergreen likes solid long-term upside potential with minimal downside risk. We anticipate ‘quotation risk’ which is simply an acknowledgement that the market will have swings in security trading prices that do not reflect any change in the underlying investment. These often inexplicable market movements are frequently good news for Wintergreen, for they create the opportunity for the Fund to acquire additional securities at attractive prices."
"Wintergreen focuses on the economics of the underlying businesses of our portfolio holdings. This analysis includes many securities that are outside of any index. For this reason, our Fund does not fit easily within the investment grids that are a popular asset allocation tool. The investment grids are frequently referenced to illustrate how closely many fund’s performance and risk track a particular index. Hedge funds are an investment opportunity for many investors who want something other than an index or index-like fund. The problem for these investors is that hedge funds are generally structured with an annual advisory fee (2% of assets plus 20% of the annual profits) that encourages greater risk through the use of leverage and/or frenzied portfolio trading that is generally inconsistent with long-term global value investing. This is not to say that index funds or hedge funds are bad ideas. Wintergreen Fund is very different and has been described as an alternative to both the standard index hugging fund and the standard high fee alternative investment."
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