Mutual Series Funds

By: Templeton  09-12-2011
Keywords: Portfolio Managers

A Strategy with Potential in all Markets

  • The Mutual Series portfolio team looks for solid, long-term deep value investment opportunities.
  • Both Mutual Beacon Fund and Mutual Discovery Fund are good choices for investors not comfortable with high risk, as the securities in which we invest are often less affected by general market movements than more volatile, high-growth companies.

Deep Value Investors

  • Mutual Series is dedicated to a unique style of deep value investing, searching aggressively for opportunities among undervalued stocks, arbitrage situations, and distressed companies.
  • As deep value investors, we focus on underlying asset value, potential catalysts and long-term intrinsic value creation, in addition to looking for solid assets undervalued by the market.
  • These undervalued positions could be companies involved in mergers or acquisitions, spin-offs, financial reorganizations, or other special situations.

Focused on Risk Management

  • At Mutual Series, we are committed to seeking out undervalued equities with a priority on risk management for our investors.
  • First, we construct the bulk of our investment portfolio with a solid base of what we believe are undervalued equities.
    • We seek to invest in fundamentally strong companies with robust balance sheets, high quality assets, and shareholder-oriented management teams whose stocks are trading at material discounts to our assessment of their intrinsic value.
    • This strict deep value approach – wherein our astute and specialized team of portfolio managers and analysts find ways to turn adversity into profits – not only enhances the likelihood of upside potential but also helps reduce the risk of substantial declines.
  • Second, we work to enhance Mutual Series’ portfolios with carefully selected investments in distressed or bankrupt companies. Often, when companies are reorganized in bankruptcy, owners of the old securities are repaid in securities of the new, stronger companies that emerge.
  • Third, we seek to participate in merger arbitrage situations, but only in announced takeover deals – another area of highly specialized investing. Furthermore, returns from the second and third areas in which we focus have historically been uncorrelated to the overall market, offering diversification benefits.

Active Follow Up and Thorough Research

  • Finding the hidden value in companies that others have overlooked requires a particular dedication.
  • Once we have identified an opportunity, our team takes an ongoing and active interest in the company to reduce risk and to help management increase shareholder value.
  • Mutual Series analysts find out what the company owns, identifies inefficiencies, and the catalysts that might enable a company’s true value to be realized.
  • This specialized approach to deep value investing has proven itself through market downturns as well as upswings.

Keywords: Portfolio Managers

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