{"id":20504,"date":"2023-09-19T10:44:36","date_gmt":"2023-09-19T10:44:36","guid":{"rendered":"https:\/\/microloannexus.com\/investing\/opinion-this-husband-and-wife-fund-management-team-reveal-how-they-beat-the-stock-market\/"},"modified":"2023-09-19T10:44:37","modified_gmt":"2023-09-19T10:44:37","slug":"opinion-this-husband-and-wife-fund-management-team-reveal-how-they-beat-the-stock-market","status":"publish","type":"post","link":"https:\/\/microloannexus.com\/?p=20504","title":{"rendered":"Opinion: This husband-and-wife fund management team reveal how they beat the stock market"},"content":{"rendered":"

The Marshfield Concentrated Opportunity Fund MRFOX offers a different twist on mutual-fund management: a husband-and-wife team.\u00a0<\/p>\n

Managers Elise Hoffmann and Chris Niemczewski say they talk stocks after hours, at dinner. Investing is about \u201ccreating a narrative and road testing it,\u201d Hoffmann says. \u201cHaving the leisure to do that over time with someone who is equally curious and immersed is a positive.\u201d\u00a0<\/p>\n

\n

This dynamic may help explain the fund\u2019s outperformance. The fund beats competing large-cap growth funds by seven percentage points annualized over the past three years, according to investment researcher Morningstar Direct. It beats competitors by four percentage points over five years. <\/p>\n

This record makes the duo a good source of market ideas and investing lessons. Here are highlights from a recent interview:\u00a0<\/p>\n

1. Don\u2019t try to forecast the economy:<\/strong> This may seem odd when investors are so focused on inflation and recession. But it makes sense. \u201cWe are adamantly opposed to spinning out a likely scenario and constructing a portfolio to fit that, because you can easily be wrong,\u201d Hoffmann says. What to do instead? She adds: \u201cWe look for companies that are likely to perform well over an economic cycle and continue to provide the value that people come to them for.\u201d<\/p>\n

Morningstar reports the fund recently had 44% of its portfolio in consumer cyclicals. This looks like a bet on the economy, but about 70% of this total is in two car-parts companies, Autozone
\n AZO,
\n -0.30%<\/bg-quote>
\n and O\u2019Reilly Automotive
\n ORLY,
\n -0.09%<\/bg-quote>,<\/span>
\n and two discount retailers, TJX
\n TJX,
\n -0.54%<\/bg-quote>
\n and Ross Stores
\n ROST,
\n -0.42%<\/bg-quote>.<\/span>
\n \u00a0\u00a0 <\/p>\n

Auto parts vendors move to their own cycle, which has little to do with economic growth. Discount retailers are counter-cyclical because consumers are more likely to shop at them when economies weaken. TJX and Ross Stores are also less likely to be disrupted by online sales since people like to shop for bargains in person.<\/p>\n

Here is another example. Insurance has its own pricing cycles disconnected from the economy. Pricing power is guided by scarcity of insurance capacity. This is driven by large disasters, Niemczewski says. \u201cIt can be hurricanes or asbestos or 9\/11. Every time you have a huge storm it chews up capacity.\u201d Arch Capital Group
\n ACGL,
\n +1.99%<\/bg-quote>
\n ) recently was the fund\u2019s largest position, at about 10 of the portfolio. The fund also was keeping just over 3% of assets in Progressive
\n PGR,
\n +1.31%<\/bg-quote>,<\/span>
\n according to the fund\u2019s most recent report.\u00a0<\/p>\n

2. Invest in climate change:<\/strong> Climate change seems to be happening, and it affects businesses in ways that catch the attention of investors.\u00a0The fund managers consider AutoZone and O\u2019Reilly in auto parts a play on climate change. \u201cOlder cars break down more often when the weather is bad,\u201d Niemczewski says. Climate change also helps insurance companies by taking capacity off the market and boosting demand. This supports premiums.\u00a0<\/p>\n

3: Be different<\/strong>: Marshfield Concentrated Opportunity Fund has concentrated positions that deviate widely from their benchmarks. The top six positions are each 5% holdings or more. The top two are near 10%. For context, a lot of mutual funds cap position size at 2%-3%. The fund managers also are not afraid to hold cash when few investment opportunities arise.\u00a0<\/p>\n

This fund only holds 17 stocks, which is unusually low. The fund managers also invest in companies that do things differently. One reason the fund holds Strategic Education
\n STRA,
\n -1.09%<\/bg-quote>
\n is the education company depends less on government-backed student loans, in favor of partnerships with businesses that foot part of the bill.\u00a0<\/p>\n

Or consider the homebuilder NVR
\n NVR,
\n +0.83%<\/bg-quote>.<\/span>
\n It\u2019s more profitable and holds up better in downturns because it is not weighed down by the expense of land holdings. It buys options on land instead. \u201cNVR has demonstrated success in up markets and down markets,\u201d Hoffmann says.\u00a0<\/p>\n

\u201cThe main thing we have learned over the years is that we have to be as different as we can stand to be, in ways that make sense to us,\u201d Niemczewski says.<\/p>\n

4. Pay attention to company culture:<\/strong> Culture can be tough to figure out from the outside. But you have to look for the subtle clues.\u00a0<\/p>\n

For instance, look for cultures that emphasize frugality. For example, the fund managers took a liking to Fastenal
\n FAST,
\n -0.56%<\/bg-quote>
\n when they visited the company in part because the offices were basic. \u201cIt was not a glamor palace,\u201d Hoffmann says. Fastenal is consistently much more profitable than competitors. Humble offices were a clue because it showed caution on expenses.<\/p>\n

Also, look for signs that companies value employees. Consider Expeditors International of Washington
\n EXPD,
\n -0.58%<\/bg-quote>.<\/span>
\n Unlike a lot of shippers, Expeditors owns no transportation assets. Instead, it buys cargo space from airlines, ocean liners, and truckers and uses it to piece together shipping routes. <\/p>\n

These logistics require special care. \u201cThey want people who can unravel problems. While systems and technology matter, packages need their advocates,\u201d Hoffmann says. So Expeditors puts a lot of value on motivated employees, and compensation is linked to branch-level performance. \u201cThis attracts people who believe in their own ambition and hard work, and it pushes out people who don\u2019t,\u201d Hoffmann says.\u00a0<\/p>\n

The fund managers also look for corporate cultures that give managers the freedom to take short-term pain to boost long-term gain. \u201cIn insurance, it is all about discipline and willingness to walk away from bad business,\u201d Niemczewski says. For example, Arch Capital has been willing to let revenue decline a lot when pricing is weak, rather than sign unfavorable policies. \u201cEveryone knows that is what you should do, and most companies don\u2019t do it,\u201d Niemczewski says.<\/p>\n

5. Embrace fear and chaos: <\/strong>Be willing to buy stocks when you are terrified. \u201cThe times I made my best buys, I felt sick,\u201d Niemczewski says. He cites purchases made in late March 2020 when the markets sold off on COVID fears. The better the buying decision, the worse it feels.\u00a0<\/p>\n

Michael Brush is a columnist for MarketWatch. At the time of publication, he had no positions in any stocks mentioned in this column. Brush has suggested AZO and FAST in his stock newsletter,\u00a0Brush Up on Stocks. Follow him on X (formerly Twitter) @mbrushstocks<\/em><\/p>\n

More:<\/strong> For better gains in tech stocks from here, look beyond the \u2018Magnificent Seven\u2019<\/p>\n

Also read: <\/strong>\u2018The rubber band is so stretched\u2019: Why this once-overlooked stock-market sector is sending a warning signal about the economy\u00a0<\/p>\n<\/p><\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The Marshfield Concentrated Opportunity Fund MRFOX offers a different twist on mutual-fund management: a husband-and-wife team.\u00a0 Managers Elise Hoffmann and Chris Niemczewski say they talk stocks after hours, at dinner. Investing is about \u201ccreating a narrative and road testing it,\u201d Hoffmann says. \u201cHaving the leisure to do that over time with someone who is equally<\/p>\n","protected":false},"author":1,"featured_media":20505,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[49],"tags":[],"class_list":{"0":"post-20504","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-investing"},"yoast_head":"\nOpinion: This husband-and-wife fund management team reveal how they beat the stock market | Micro Loan Nexus<\/title>\n<meta name=\"description\" content=\"The Marshfield Concentrated Opportunity Fund MRFOX offers a different twist on mutual-fund management: a husband-and-wife team.\u00a0Managers Elise Hoffmann\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/microloannexus.com\/?p=20504\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Opinion: This husband-and-wife fund management team reveal how they beat the stock market | Micro Loan Nexus\" \/>\n<meta property=\"og:description\" content=\"The Marshfield Concentrated Opportunity Fund MRFOX offers a different twist on mutual-fund management: a husband-and-wife team.\u00a0Managers Elise Hoffmann\" \/>\n<meta property=\"og:url\" content=\"https:\/\/microloannexus.com\/?p=20504\" \/>\n<meta property=\"og:site_name\" content=\"Micro Loan Nexus\" \/>\n<meta property=\"article:published_time\" content=\"2023-09-19T10:44:36+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-09-19T10:44:37+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/microloannexus.com\/wp-content\/uploads\/2023\/09\/1695120277_social.jpeg\" \/>\n\t<meta property=\"og:image:width\" content=\"1280\" \/>\n\t<meta property=\"og:image:height\" content=\"640\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"News Room\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"News Room\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/microloannexus.com\/?p=20504#article\",\"isPartOf\":{\"@id\":\"https:\/\/microloannexus.com\/?p=20504\"},\"author\":{\"name\":\"News Room\",\"@id\":\"https:\/\/microloannexus.com\/#\/schema\/person\/e2d3b62d35ac325be68540d68dc6660a\"},\"headline\":\"Opinion: This husband-and-wife fund management team reveal how they beat the stock market\",\"datePublished\":\"2023-09-19T10:44:36+00:00\",\"dateModified\":\"2023-09-19T10:44:37+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/microloannexus.com\/?p=20504\"},\"wordCount\":1062,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/microloannexus.com\/#organization\"},\"articleSection\":[\"Investing\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/microloannexus.com\/?p=20504#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/microloannexus.com\/?p=20504\",\"url\":\"https:\/\/microloannexus.com\/?p=20504\",\"name\":\"Opinion: This husband-and-wife fund management team reveal how they beat the stock market | Micro Loan Nexus\",\"isPartOf\":{\"@id\":\"https:\/\/microloannexus.com\/#website\"},\"datePublished\":\"2023-09-19T10:44:36+00:00\",\"dateModified\":\"2023-09-19T10:44:37+00:00\",\"description\":\"The Marshfield Concentrated Opportunity Fund MRFOX offers a different twist on mutual-fund management: a husband-and-wife team.\u00a0Managers Elise Hoffmann\",\"breadcrumb\":{\"@id\":\"https:\/\/microloannexus.com\/?p=20504#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/microloannexus.com\/?p=20504\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/microloannexus.com\/?p=20504#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/microloannexus.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Opinion: This husband-and-wife fund management team reveal how they beat the stock market\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/microloannexus.com\/#website\",\"url\":\"https:\/\/microloannexus.com\/\",\"name\":\"Solutions For Real\",\"description\":\"Latest Finance News and Updates\",\"publisher\":{\"@id\":\"https:\/\/microloannexus.com\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/microloannexus.com\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/microloannexus.com\/#organization\",\"name\":\"Solutions For Real\",\"url\":\"https:\/\/microloannexus.com\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/microloannexus.com\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/microloannexus.com\/wp-content\/uploads\/2023\/08\/sf-logo-1.png\",\"contentUrl\":\"https:\/\/microloannexus.com\/wp-content\/uploads\/2023\/08\/sf-logo-1.png\",\"width\":690,\"height\":64,\"caption\":\"Solutions For Real\"},\"image\":{\"@id\":\"https:\/\/microloannexus.com\/#\/schema\/logo\/image\/\"}},{\"@type\":\"Person\",\"@id\":\"https:\/\/microloannexus.com\/#\/schema\/person\/e2d3b62d35ac325be68540d68dc6660a\",\"name\":\"News Room\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/microloannexus.com\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/microloannexus.com\/wp-content\/uploads\/2023\/08\/avatar_user_1_1691264579-96x96.png\",\"contentUrl\":\"https:\/\/microloannexus.com\/wp-content\/uploads\/2023\/08\/avatar_user_1_1691264579-96x96.png\",\"caption\":\"News Room\"},\"sameAs\":[\"https:\/\/microloannexus.com\"],\"url\":\"https:\/\/microloannexus.com\/?author=1\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Opinion: This husband-and-wife fund management team reveal how they beat the stock market | Micro Loan Nexus","description":"The Marshfield Concentrated Opportunity Fund MRFOX offers a different twist on mutual-fund management: a husband-and-wife team.\u00a0Managers Elise Hoffmann","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/microloannexus.com\/?p=20504","og_locale":"en_US","og_type":"article","og_title":"Opinion: This husband-and-wife fund management team reveal how they beat the stock market | Micro Loan Nexus","og_description":"The Marshfield Concentrated Opportunity Fund MRFOX offers a different twist on mutual-fund management: a husband-and-wife team.\u00a0Managers Elise Hoffmann","og_url":"https:\/\/microloannexus.com\/?p=20504","og_site_name":"Micro Loan Nexus","article_published_time":"2023-09-19T10:44:36+00:00","article_modified_time":"2023-09-19T10:44:37+00:00","og_image":[{"width":1280,"height":640,"url":"https:\/\/microloannexus.com\/wp-content\/uploads\/2023\/09\/1695120277_social.jpeg","type":"image\/jpeg"}],"author":"News Room","twitter_card":"summary_large_image","twitter_misc":{"Written by":"News Room","Est. reading time":"5 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/microloannexus.com\/?p=20504#article","isPartOf":{"@id":"https:\/\/microloannexus.com\/?p=20504"},"author":{"name":"News Room","@id":"https:\/\/microloannexus.com\/#\/schema\/person\/e2d3b62d35ac325be68540d68dc6660a"},"headline":"Opinion: This husband-and-wife fund management team reveal how they beat the stock market","datePublished":"2023-09-19T10:44:36+00:00","dateModified":"2023-09-19T10:44:37+00:00","mainEntityOfPage":{"@id":"https:\/\/microloannexus.com\/?p=20504"},"wordCount":1062,"commentCount":0,"publisher":{"@id":"https:\/\/microloannexus.com\/#organization"},"articleSection":["Investing"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/microloannexus.com\/?p=20504#respond"]}]},{"@type":"WebPage","@id":"https:\/\/microloannexus.com\/?p=20504","url":"https:\/\/microloannexus.com\/?p=20504","name":"Opinion: This husband-and-wife fund management team reveal how they beat the stock market | Micro Loan Nexus","isPartOf":{"@id":"https:\/\/microloannexus.com\/#website"},"datePublished":"2023-09-19T10:44:36+00:00","dateModified":"2023-09-19T10:44:37+00:00","description":"The Marshfield Concentrated Opportunity Fund MRFOX offers a different twist on mutual-fund management: a husband-and-wife team.\u00a0Managers Elise Hoffmann","breadcrumb":{"@id":"https:\/\/microloannexus.com\/?p=20504#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/microloannexus.com\/?p=20504"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/microloannexus.com\/?p=20504#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/microloannexus.com\/"},{"@type":"ListItem","position":2,"name":"Opinion: This husband-and-wife fund management team reveal how they beat the stock market"}]},{"@type":"WebSite","@id":"https:\/\/microloannexus.com\/#website","url":"https:\/\/microloannexus.com\/","name":"Solutions For Real","description":"Latest Finance News and Updates","publisher":{"@id":"https:\/\/microloannexus.com\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/microloannexus.com\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/microloannexus.com\/#organization","name":"Solutions For Real","url":"https:\/\/microloannexus.com\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/microloannexus.com\/#\/schema\/logo\/image\/","url":"https:\/\/microloannexus.com\/wp-content\/uploads\/2023\/08\/sf-logo-1.png","contentUrl":"https:\/\/microloannexus.com\/wp-content\/uploads\/2023\/08\/sf-logo-1.png","width":690,"height":64,"caption":"Solutions For Real"},"image":{"@id":"https:\/\/microloannexus.com\/#\/schema\/logo\/image\/"}},{"@type":"Person","@id":"https:\/\/microloannexus.com\/#\/schema\/person\/e2d3b62d35ac325be68540d68dc6660a","name":"News Room","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/microloannexus.com\/#\/schema\/person\/image\/","url":"https:\/\/microloannexus.com\/wp-content\/uploads\/2023\/08\/avatar_user_1_1691264579-96x96.png","contentUrl":"https:\/\/microloannexus.com\/wp-content\/uploads\/2023\/08\/avatar_user_1_1691264579-96x96.png","caption":"News Room"},"sameAs":["https:\/\/microloannexus.com"],"url":"https:\/\/microloannexus.com\/?author=1"}]}},"_links":{"self":[{"href":"https:\/\/microloannexus.com\/index.php?rest_route=\/wp\/v2\/posts\/20504","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/microloannexus.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/microloannexus.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/microloannexus.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/microloannexus.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=20504"}],"version-history":[{"count":1,"href":"https:\/\/microloannexus.com\/index.php?rest_route=\/wp\/v2\/posts\/20504\/revisions"}],"predecessor-version":[{"id":20506,"href":"https:\/\/microloannexus.com\/index.php?rest_route=\/wp\/v2\/posts\/20504\/revisions\/20506"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/microloannexus.com\/index.php?rest_route=\/wp\/v2\/media\/20505"}],"wp:attachment":[{"href":"https:\/\/microloannexus.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=20504"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/microloannexus.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=20504"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/microloannexus.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=20504"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}