Ken Fisher’s Fisher Asset Management filed its most recent 13F, for the reporting period of March 31, on April 30. Since then we’ve covered the billionaire’s top picks for the quarter, his top new holdings, and his top picks that insiders also love. Now let’s take a look at some of his top longterm holdings, all of which he has held for at least three years.
Unsurprisingly, the majority of Fisher’s top longterm holdings are in large-cap stocks. Hedge funds and other big money managers like Fisher prefer to have the largest amounts of their capital invested in large and mega-cap stocks because these companies allow for more stability for their immense capital allocation. That’s why if we take a look at the most popular stocks among hedge funds, we won’t find any mid- or small-cap stocks there. However, our backtests of hedge funds’ equity portfolios between 1999 and 2012 revealed that the 50 most popular stocks among hedge funds underperformed the market by seven basis points per month. On the other hand, we found that hedge fund expertise does give them a significant advantage over the average investor when it comes to small-cap stocks. This was confirmed through backtesting and in forward tests of our small-cap strategy since 2012. The strategy, which involves imitating the 15 most popular small-cap picks among hedge funds has returned more than 137%, beating the broader market by over 82 percentage points through the end of March (see the details).
Procter & Gamble Co (NYSE:PG) is one of Fisher’s longest holdings, dating all the way back to at least the first quarter of 1999 and his first recorded 13F filing in the SEC’s online database. Fisher currently holds 7.32 million shares valued at $564.23 million. It hasn’t necessarily been the best longterm investment, as shares have risen just over 60% in the last 16 years, an average appreciation of just 4% annually. While returns are a little stronger when we factor in dividend payments, which Procter & Gamble Co (NYSE:PG) has been paying out since 1987 with an average yield of between 2% and 3%, we can imagine the returns haven’t been what Fisher envisioned for the position.
More recently, the consumer goods giant has sought ways to further dismantle its business in an effort to improve its financial results. Among other moves, Procter & Gamble Co (NYSE:PG) sold its Duracell business for approximately $3 billion to billionaire Warren Buffett’s holding company Berkshire Hathaway, which also happened to be a longterm shareholder of Procter & Gamble Co (NYSE:PG). Buffett will trade in his $4.8 billion stake in Procter and Gamble as part of the transaction, with the company paying the difference to him in cash. That will leave value investor Donald Yacktman as the largest shareholder in our database once the transaction is completed later this year, with Yacktman owning 28.37 million shares through the end of the first quarter.
Apple Inc. (NASDAQ:AAPL) stands as another of Fisher’s top longterm holdings, with the position he first opened in the third quarter of 2002 now ranking in his top ten most valuable holdings as of March 31. The position of 10.51 million shares held a value of $664.34 million. Apple Inc. (NASDAQ:AAPL), which owns one of the most profitable businesses ever, has performed far batter than Procter & Gamble during that long run, to say the least. Apple’s shares have gained over 3,600% in those 13 years, rising from a mere $3.50 (based on a post stock-split calculation) to over $127. Also unlike Procter & Gamble, things only seem to be getting better and better for Apple, which is coming off back-to-back record setting earnings periods.