Fund or
affiliation
- Windsor Fund,
Wellington Management
Methodology
- Value investing with
a stress on dividend income.
Research Techniques
Employed
- Neff has access to
the analysts in his parent company, Wellington
Management.
- Although Neff
doesn’t ordinarily visit companies, he talks
to them at length.
Trading/ Valuation
Techniques Employed
- Only buys when a
stock is too cheap and acting badly at that
moment in the market. Infallibly sells when it is
too expensive and acting strongly in the market.
- Tolerates portfolio
concentration in industry groups.
- Average holding is
1/3 lower than market P/E, and with dividend
yield 2% higher.
- ( Growth Rate +
Dividend Yield ) / PER = "What you get for
what you pay"
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Philosophy
and beliefs
- Insistence on
income: people overpay for growth.
- Growth stocks suffer
from high mortality.
- Often can get better
total return from slower growth companies paying
high dividend.
History and other
facts
- Choice of money
managers themselves to manage their own money.
- Windsor (in 1988)
has become one of the largest equity and income
fund in USA.
- In 1980, U. Penn
asked Neff to manage its endowment.
- Issues "Report
Card" on his transactions.
- Part of the pay
package of Neff and his team is an incentive fee.
Examples
- Went 25% of assets
into oil stocks after collapse of OPEC in 1986.
- Bought Ford heavily
in early 1984 at under $14, 3 years later Ford
reached $50.
Performance Record
- 14.3% over 24 years:
"Neff has run the Windsor Fund for 24 years.
Through 1988 it had a compound annual return of
14.3% versus S&P’s 9.4% over the same
period", J.Train, NMM pp. 138
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