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FPA Crescent Fund
TICKER
ASSETS
FPACX
$ 8.9 billion
PERFORMANCE YTD 1 yr . 3 yr . 5 yr . 10 yr . 15 yrs . 12.47 % 15.73 % 9.65 % 7.84 % 6.78 % 9.05 %
TOP 5 HOLDINGS Alphabet Inc .; Comcast Corp .; Holcom LTD ; AIG ; Analog Devices Inc .
CONTACT INFO 800-982-4372 • fpa . com
Steve Romick
64 + 28 + 5 + 3
PORTFOLIO STRUCTURE n Common Stocks 64.3 % n Cash & Equivalents 28.1 % n Other 4.3 % n Bonds / Credit 3.3 %
Performance and asset numbers as of 11 / 7 / 23 . Holdings as of 9 / 30 / 23 . Sources : First Pacific Advisors LP and Morningstar .
This Go-Anywhere Fund Goes Places
The 30-year-old FPA Crescent Fund has made money across different market cycles . By Jeff Schlegel
STEVE ROMICK LIKES TO USE COLORFUL METAPHORS to describe his investment process at the FPA Crescent Fund , which he has run since its inception 30 years ago . This go-anywhere fund invests across capital structures , geographies , sectors and market caps , targeting equities and fixed income , along with a dollop of unconventional asset types .
“ We are free-range chickens ,” says Romick , who since 2013 has shared portfolio manager duties with Mark Landecker and Brian Selmo .
But the fund ’ s mulligan stew approach makes it hard to categorize . Morningstar , for example , puts it into its amorphously labeled “ moderately aggressive allocation ” category . The fund ’ s managers compare the portfolio ’ s performance against four different benchmarks — the MSCI ACWI ( which stands for All Country World Index ) and the S & P 500 for equities , and separate ( but hypothetical ) 60 / 40 bogeys with the 60 % equity portion being either the ACWI or the S & P 500 and the 40 % fixed-income portion tracking the Bloomberg U . S . Aggregate index .
“ How do you benchmark a fund whose stated goal is to provide equity-like returns while avoiding permanent loss of capital ?” Romick asks rhetorically . “ We have lots of tools at our disposal beyond common stocks , such as preferred stocks , junior and senior debt , bank debt , convertible notes . We use some derivative notes periodically . We do some shorting .
“ We look at the MSCI ACWI as the most traditional benchmark to compare us to since we became more global starting in 2011 , but I think it ’ s also reasonable to look at a CPI-plus benchmark as well ,” he continues , referring to the Consumer Price Index , plus a subjective equity risk premium added by the firm .
No matter the benchmark , Romick views his fund as the furthest thing from a closet index . “ We just do what we do .”
And what he and his team have done is provide positive returns , making their fund one of the top performers in its
PHOTOGRAPHY COURTESY OF FIRST PACIFIC ADVISORS DECEMBER 2023 | FINANCIAL ADVISOR MAGAZINE | 51