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Bruce Fund (BRUFX)

The Bruce fund has been under performing the last two years. Its on track to lose money again in 2023 which will make it two years in a row of negative returns. What insight does the group have on the Bruce Fund other than the Dad passed away this year. Is this a sign that Dad was the one making all of the correct decisions?


  • msf
    edited December 2023
    Don't look to M* for insight. Its brilliant quantitative analysis suggests that in light of the recent management change you noted the fund could do more to retain its portfolio managers. What exactly does M*'s crackerjack computer have in "mind"?

    The fund itself did very well, relatively speaking, in 2022 - 15th percentile. It was the stock and bond markets that didn't. This year is different, but for a fund with a single digit turnover rate Dad may still have a sizeable impact on the fund.

    But that was as of June 30th. More than 10% of the shares of the top six holdings (comprising over 1/4 of the fund) were pruned between June and September. So perhaps you're seeing a rapid change now.
  • Never owned it, never before looked at it so I know squat but this fund is positioned for catastrophe. That 33% slug of cash did not help in 2023, but did in 2022. Some people are very uncomfortable with volatility, and that's totally understandable, but if you're going to lose less in down markets you have to expect to gain less in up ones. Of the so-called "Magnificent Seven" the fund owns only a small slice of Apple so no wonder it didn't do so well this year. I guess the counter-argument to a fund like this is stocks usually go up over time so if you want that gain you have to own stocks. Personally, I prefer to set my own cash balance rather than pay a fund manager to do it.
  • You would think M* would be embarrassed to publish that under their brand.

    As far as BRUFX quick looks shows 35% cash and overweighting in healthcare and underweight tech. Exactly the wrong positioning for this year

    Do they produce any data about how their stocks do without the cash? Sometimes that helps determine how much is asset allocation alone
  • This fund appears to be over concentrated in pharmaceuticals and energy; not diversified at all. When benchmarked against the S&P500 (may not be the most appropriate benchmark for this portfolio) it has underperformed steadily for the last 12 years. I'd definitely move on and look for a more diversified fund that is performing competitively against a broad market index. Some good things to say about Bruce: low expense ratio, low turnover, no-load.
  • edited December 2023
    I own it in the wife's IRA. Only just more than 4% of the entire portfolio's total. Rates coming down ought to help, whenever that may start. Seems to me they "forgot" to take the annual small IRA maintenance fee.

    I have lotsa free time. I check every day. BRUFX is heavy with SMIDs. Surely, that's a drawback. The elder Bruce died, yes, and I couldn't believe my eyes when Morningstar downgraded it because of personnel changes. Jayzuz. I admit I'm getting itchy. That big cash stake hurts.

    "...The strategy's portfolio management team does not stand out and still needs to prove it has a competitive advantage. This earns the strategy an Average People Pillar rating, recently downgraded from Above Average. The strategy's effective investment approach earns an Above Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a considerable underweight position in the Europe-Developed region and has a considerable overweight in developed markets regions compared with category peers. The strategy's parent organization is industry standard, albeit with some strong attributes like an experienced bench of portfolio managers, but is held back by low portfolio manager retention. This earns the firm an Average Parent Pillar rating...." ---Morningstar.

    Ridiculous, risible. The ONLY Manager now is the younger Bruce, the son. Unless I missed an announcement?

    Not only is the Fund heavy with SMIDs, but it's got a VALUE tilt. Looking back, it's not been VALUE'S time in the sun lately, right?
    Fixed Income: 4.59%.
    "Cash" 32.31%

    There's something less than half a billion dollars AUM. If Mr. Bruce is bound and determined to be contrarian, I'd say the Fund's results are showing it. If that is the case, then performance comparisons won't be very-well focused, targeted. But no one should be pleased to end-up the year at THE very bottom of the pack.

    YTD and 1-year: 100th percentile.
    But looking backward over several years, performance has been quite good IN COMPARISON to its peers. But... who are its peers?

  • can I be stupid and ask what is a SMID
  • edited December 2023

    can I be stupid and ask what is a SMID

    "Smid" is a contraction referring to a combination of both small-caps and mid-caps. :)
    No worries. It's good that you asked. Might also fill-in the gaps for someone else, too.
    Happy New Year!

  • edited December 2023
    The question is then, IMHO; what becomes of the Bruce fund if the son becomes impaired or otherwise. Disclaimer: We're not or have ever been invested in this fund.
  • As a former Bruce shareholder, I forgave the quirkiness while returns were OK. Have to say I'm glad I bailed because I would not now want a "balanced" fund in my lineup that held lots of cash and was way overweight in healthcare and utilities. @Crash asked about peers: Steve Rommick at FPACX is hardly conventional, now holding 20% cash, but he and his team deliver solid results.

    It's hard to find accurate comparisons; M* categorizations of allocation funds are imperfect and the Lipper/MFO Premium "Flexible Portfolio" category admits hybrids of many stripes.
  • Excellent article, @TheShadow

    I’ve invested in some of the funds discussed in the article, but not Bruce. I might still be invested in YACKX but they instituted a hard close, even for existing investors. So I switched to PRBLX, which was all for the better.
  • From memory, I could never buy BRUFX at Fidelity or Schwab = end of story.
  • Looks like Mr. Bruce has locked in AAA 10 and 20-year duration, quite a bit, with the bond sleeve. A balanced fund with 3.04% yield? That's lovely. OK, so... What about the GROWTH, eh? A correction: most of the holdings are MID-CAP, but bordering on Large Cap. (Morningstar, 30 Sept.)

    Of course, IF I decide to bail, the thing will zoom upward. ... Opportunity cost is my focus with regard to BRUFX now.
  • msf
    edited December 2023
    The Sept 2023 portfolio has 35.9% in fixed income and cash. That breaks down into:

    2.6% a STRIPS maturing in 2036 (12 year duration),

    1.0% a STRIPS maturing in 2041 (17 year duration),

    1.1% a STRIPS maturing in 2049 (25 year duration),

    2.8% health care convertible bonds maturing in 2024 (or earlier, in default),

    28.4% money market funds

    That's a barbell, with nearly all the weight on the short end (including the MMF). Very conservative. Just a little speculation on interest rates falling, in which case the STRIPS will pop.
  • Ah, good. Thanks for setting me straight. @msf.
  • This fund per the prospectus is for the investor with a high tolerance for risk and a long-term time horizon. The fund manager invests in this fund. A true managed investment. No out of benchmark type investments here. You will find AAA bonds or an investment in a company near bankruptcy. Real savings here due to the way shares are purchased. Check the investment restrictions outlined in the prospectus. To me they seem prudent. To me this fund is for the independent investor who desires something different.
  • edited March 26
    Different is great when your fund have better performance or at least better risk-adjusted performance, the rest are just excuses, such as diversification, SC, EM, Value looks great based on indicators that have been inaccurate for years, you can't compare a fund to any benchmark, others.
  • Two years of rather dismal performance. 2023 and now well into 2024. We are moving out of BRUFX. Years ago, it soared near the top of its performance category. Respectable profit for shareholders. No more. We have a long time horizon, and a couple of middling years is OK. But nothing like the current dismal track record. So, we are moving on. Reducing risk into WBALX, and it pays twice a year, in June and December.
  • I too have owned BRUFX and wonder why the performance has been subpar the last two years. I have DODGX and they used to perform very similarly but BRUCE has performed much worse lately. post above about their being a lot of movement in the stock portfolio lately
  • Remember that what used to be a father-son team at this tiny 1-fund BRUFX boutique shop, now has only the son being President, Vice-President, Treasurer, Compliant Officer, analyst, etc. M* is funny when it says, "The fund last saw a manager change eight months ago, which suggests that it could do more to retain its portfolio managers." (of course, that's the computer-generated Q-gibberish).
  • The Bruce Fund currently yielding 2.9% and has a large cash position. In a bear market which always comes this fund would outperform. The board of directors were pleased with the long term management of this fund. Check the current holdings and see if you would be interested in owning them. Market sector popularity change dramatically year to year. Templeton said buy when there is blood in the streets. Very common for people to buy at market tops because numbers look nice.
  • edited April 3
    44% of AUM in top 10 holdings. THAT'S conviction. Top holding is almost 8% of the whole pie. If I myself failed to rebalance, I might get to 8% with a single stock, and it would be not very smart to let that happen. He's got $433 million to play with. Eight percent of that number is one BIG slug of dough. That top holding has had a great 12-month run, granted.
  • So, the "Schwab guy" downtown simply dropped the ball. So, we'll do an indirect Rollover, ourselves. We found out over the phone that the only way to get our money out of there is by filling out a form and sending it back to them at Bruce. That is, once you get past the passive-aggressive bitch on the phone, who is all smiles, with the most pleasant outward demeanor, but who is intentionally unhelpful. Yes, I told her boss about it, and reminded him of our previous experience with her, too. The website is an outdated relic from 1989. It's basically only good for displaying your total in the account.
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