Ivascyn generated some of his best returns by buying mortgage debt that didn’t have the backing of the U.S. government through companies such as Fannie Mae. The debt returned more than 20 percent in 2012. Ivascyn focused on mortgages tied to the low-priced homes that are being bought up and rented out by institutional investors.
Assets Triple
The fund attracted more than $12 billion last year, roughly tripling its assets. Ivascyn, 44, has a message for those just coming to the fund.
“Fixed-income investors in general need to be comfortable with lower returns going forward,” he says.
Bloomberg Markets also ranked the fastest-growing exchange- traded funds, with the iShares JPMorgan USD Emerging Markets Bond fund topping a list dominated by funds in which investors seek yield above what they can get from U.S. Treasuries by buying international stocks and bonds and niche funds like real estate.
Mulholland at the Matthew 25 fund achieved his results without much help. He handles all of the fund’s investment chores himself -- a task made easier by the fact that he typically owns fewer than 25 stocks and has a buy-and-hold philosophy. He has two part-time staff people to handle administrative chores.
Scripture Inspires
Mulholland works out of an office in Jenkintown, Pennsylvania, north of Philadelphia, that is close both to his house and to the Roman Catholic church he visits twice a day to pray. The fund is named for a chapter in the New Testament gospel of Matthew whose message of hard work and humility Mulholland finds inspiring.
Mulholland’s management of his fund is strictly secular. He ranks companies with letter grades, A to F, in four categories: quality of the business, quality of management, financial strength and price. For a new stock to make it into the portfolio, it has to have a higher cumulative grade than an existing holding, he says.
Mulholland can be effusive about his favorite stocks. Speaking about Polaris, he says: “I love the company. I love being part of the business.”