Smead Value Fund Focuses on the Long Term

This concentrated fund looks for a few high-quality stocks at bargain prices.

When a mutual fund holds a limited number of stocks, investors should brace themselves for occasional short-term volatility. Consider Smead Value (SMVLX), a fund that invests in 26 large-company stocks. Over the past three years, the fund has been about 11% more volatile than Standard & Poor’s 500-stock index, and it lost $1.19, on average, for every $1 drop in the index.

Such is life for concentrated-portfolio managers investing for the long term, says comanager Bill Smead. But for investors who have been willing to stomach the ride over the years, owning the fund has paid off. The fund has outpaced the S&P 500 in eight of the past 10 calendar years, including 2018 through early December. Over a 10-year span, the fund’s 15.2% annualized return beats the S&P and 97% of large-company value-oriented stock funds.

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Ryan Ermey
Former Associate Editor, Kiplinger's Personal Finance

Ryan joined Kiplinger in the fall of 2013. He wrote and fact-checked stories that appeared in Kiplinger's Personal Finance magazine and on Kiplinger.com. He previously interned for the CBS Evening News investigative team and worked as a copy editor and features columnist at the GW Hatchet. He holds a BA in English and creative writing from George Washington University.