Thornburg Value Fund is a focused portfolio of mostly U.S. companies, selected via a fundamentals-driven, valuation-sensitive process. The fund is centered on providing attractive risk-adjusted returns with mitigated volatility versus the benchmark S&P 500 Index.
“Since 1995, this fund has successfully invested in promising companies selling at a discount to their intrinsic values. We believe this approach to be a durable and common-sense investment strategy. The fund has the flexibility to seek value broadly, employing our basket structure to ensure diversification. We want each holding to matter to fund performance. Importantly, this has worked over the long term for our investors.”
— Robert MacDonald
The fund has never been a deep-value portfolio seeking only beaten-up, tired businesses trading at low multiples. Rather, we believe that future price appreciation can belong to businesses with a bright future—businesses with promise.
We employ more flexibility than other value strategies in that the companies we consider tend to have attractive growth prospects. We don’t limit ourselves to a traditional, one-dimensional view of value.
We focus on constructing a core portfolio with potential to outperform its benchmark over time. We diversify the portfolio via several means, one of which is Thornburg’s three-basket diversification construct:
Basic Value: Companies generally operating in mature industries and which generally exhibit more economic sensitivity and/or higher volatility in earnings and cash flow.
Consistent Earners: Companies which generally exhibit predictable growth, profitability, cash flow and/or dividends.
Emerging Franchises: Companies with the potential to grow at an above average rate because of a product or service that is establishing a new market and/or taking share from existing participants.