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The Three Silos
Thornburg Value Fund
Interview with: William V. Fries

Author: Alexander Vantchev
Last Update: , :
There is more to Thornburg Value Fund than value. William Fries runs his top-quintile portfolio by allocating across three broad categories Ė basic value, consistent earners, and emerging franchises.

Thornburg Value Fund

In the present time, I would be more inclined to add a stock to the portfolio if it were in a cyclical industry with improving fundamentals than I would be to add to a position in letís say a healthcare stock, or consumer staple stock, or food stock, partly because I think the economy is going to be improving in earnings.

The competition for earnings improvement is going to be won by companies that have cut costs a great deal in the past couple of years and have earnings or revenue improvements and that will impact margins and profitability generally. So, to answer your question, I think we are aware of it but we are not like an index. I mean, you canít be, when youíve only got less than 10% of the S&P 500 in terms of the number of names in your portfolio. I will say if you quantitatively looked at our results, you will find that we have pretty much provided value-added alpha with a beta that is slightly less than the margin, which I think is what people like to do Ė getting returns without having a lot of volatility.

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