Portfolio Manager Perspectives

Jeff Benjamin

Neuberger Berman's Arthur Moretti: Pick stocks that will grow while things are slow

Nov 5, 2009 @ 3:28 pm

By Jeff Benjamin

The stock market over the next several months will be most kind to those companies that have the ability to grow in a slower economy, according to Arthur Moretti, manager of the $1.1 billion Neuberger Berman Guardian Fund (NGUAX).

And at this point in the economic cycle, avoiding certain investments — such as credit-sensitive financial companies, retailers and heavy industrial firms — is as important as picking potential winners.

“A lot of the stocks we're avoiding have benefited from a secular rebound and a belief that the rebound will continue,” Mr. Moretti said. “I think we've had a strong inventory cycle, but we're sort of in a mirror image of where we were in August 2008.”

By that, Mr. Moretti was implying that many of the companies that had the foresight to cut spending and production early in the downturn are the same ones that are ramping up now.

One example of a company that has grown even as the economy contracted in late 2008 and early this year is the fund's largest holding, Intuit Inc. (INTU), a financial and business management software company known for its Quicken programs.

“We're focused on companies that have a high value proposition in this economy,” he said.

Another company Mr. Moretti identified as having a “secular tail wind even in a slower growth environment” is Altera Corp. (ALTR), a manufacturer of programmable computer chips.

Mr. Moretti's fund typically holds between 30 and 40 stocks, and keeps annual turnover at around 20%, reflecting a holding period of between three and five years.

“We try to think of ourselves as business analysts,” he said, “and we're trying to buy shares of companies when they are statistically inexpensive.”

Portfolio Manager Perspectives are regular interviews with some of the most respected and influential fund managers in the investment industry. For more information, please visit InvestmentNews.com/pmperspectives .

0
Comments

What do you think?

View comments

Recommended for you

Featured video

Events

These are the federal and state rules that will most impact 401(k) advisers

Will Hansen, chief governmental affairs officer for the National Association of Plan Advisors, discusses regulation and legislation poised to have the biggest impact on advisers.

Latest news & opinion

IBD report: Another impressive year

Despite a stock market decline, revenue is up. And the streak isn't expected to end anytime soon.

IBDs with the most CFPs

How many of the more than 83,000 certified financial planners are employed by the big independent broker-dealers?

Richard Thaler wants to use 401(k)s to boost Social Security payments

The Nobel laureate wants to simplify drawing down retirement assets, which he thinks is 'way harder' than saving the money.

InvestmentNews announces 2019 Innovation Awards winners

Sheryl Garrett is this year's InvestmentNews Icon.

Morgan Stanley rides wealth management train to solid first quarter

Chairman and CEO James Gorman expresses excitement about expanding into workplace plans with purchase of Solium.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print