investing

Core Values Reward Investors

A Wall Street aristocrat delivers steady results by investing in firms with loyal customers.

Think of Brown Brothers Harriman, a blueblood investment firm that dates back to 1818, and mutual funds don't come to mind. Yet the firm runs four of them, and one, BBH Core Select (symbol BBTEX), has been a top performer in recent years.

One reason for the good numbers is that the fund lost "only" 22% in 2008, outpacing Standard & Poor's 500-stock index by 15 percentage points. Michael Keller, who runs the fund with Timothy Hartch, says steady performance in rocky markets stems from the managers' focus on companies with strong balance sheets and vast and loyal customer bases. "We like companies that generate cash even in a downturn," says Keller.

Intuit and Costco are two big holdings that fit the mold. Intuit, which sells financial software, such as Quicken and TurboTax, collects money when customers buy its programs. Keller thinks Intuit will benefit as customers migrate from buying software in shrink-wrapped packages to purchasing it online. Costco, the warehouse retail giant, gets a steady stream of cash from the membership fees paid by more than 55 million loyal members; nearly 90% of Costco's customers in the U.S. and Canada renew each year. The shares of both Costco and Intuit have climbed over the past three years, even as the S&P 500 has lost value.

The fund, which recently held just 29 stocks, requires a $10,000 minimum if you invest directly with BBH. Some discount brokers will let you in for less.

Most Popular

Your Guide to Roth Conversions
Special Report
Tax Breaks

Your Guide to Roth Conversions

A Kiplinger Special Report
February 25, 2021
The 12 Best Tech Stocks to Buy for 2022
tech stocks

The 12 Best Tech Stocks to Buy for 2022

The best tech-sector picks for the year to come include plays on some of the most exciting emergent technologies, as well as several old-guard mega-ca…
January 3, 2022
How to Know When You Can Retire
retirement

How to Know When You Can Retire

You’ve scrimped and saved, but are you really ready to retire? Here are some helpful calculations that could help you decide whether you can actually …
January 5, 2022

Recommended

Is the Stock Market Closed on MLK Day?
Markets

Is the Stock Market Closed on MLK Day?

Both the stock markets and bond markets will have Monday off as the nation honors civil rights leader Martin Luther King Jr.
January 15, 2022
Stock Market Holidays in 2022
Markets

Stock Market Holidays in 2022

Is the stock market open today? Take a look at which days the NYSE, Nasdaq and bond markets take off in 2022.
January 14, 2022
5 Beginner Investing Tips for a Healthy Headspace
Becoming an Investor

5 Beginner Investing Tips for a Healthy Headspace

Lousy with numbers? Bad with money? That's OK. By adopting the right mentality, you can learn not only how to invest, but how to do so effectively.
December 30, 2021
The 2022 Stock-Market Outlook with Anne Smith and James K. Glassman
Markets

The 2022 Stock-Market Outlook with Anne Smith and James K. Glassman

Sure, measuring stock markets by calendar years is a bit artificial, but it’s still a good way to give your portfolio a checkup. We forecast what stoc…
December 28, 2021