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FPA New Income (FPNIX) has gone on what it calls a “buyer’s strike.” Worried that bond prices are rich, the fund has been avoiding long bonds and most government issues. Portfolio manager Tom Atteberry says that the huge budget deficits will eventually cause trouble as bond prices tank and interest rates rise. To protect shareholders, he is focusing on bonds with maturities of less than five years. The shorter issues are likely to be resilient if interest rates rise.

So far FPA’s position has not produced encouraging results. With interest rates dropping slightly in recent years, long Treasuries have outperformed short bonds. During the year ending in May, FPA trailed 67 percent of its competitors, according to Morningstar. Some shareholders are grumbling and leaving the fund. But Atteberry is determined to stick by his guns.

FPA is not the only high-profile fund to go on strike. At a time when the markets are plagued by sluggish economic growth and unnerving debt burdens, some prominent funds are avoiding major categories of stocks or bonds. The cautious mangers include Bill Gross of PIMCO, Jeremy Grantham of GMO, and Martin Whitman of Third Avenue Management. Should you bet on those star managers? Perhaps. The managers all made successful calls in the past. But investors should proceed carefully. If the latest strategies misfire, these winning managers could suffer big setbacks.

FPA ranks as one of the most contrarian bond funds. Tom Atteberry and his predecessor, FPA CEO Bob Rodriguez, have long gone against the crowd. When junk bonds collapsed in 2002, FPA scooped up bargains and scored gains the next year. The managers were early to spot troubles in the mortgage markets. By staying away from subprime mortgages and focusing on high-quality securities, FPA New Income surpassed competitors in 2008.

But even by its contrarian standards, FPA’s current position is extreme. To appreciate how cautious Atteberry has become, consider that the Barclays Capital Aggregate Bond index has a duration of 4.6 years. So the benchmark will lose about 4.6 percent if interest rates rise 1 percentage point. In contrast, FPA only has a duration of 1.5 years, an unusual position for a fund that traditionally fit in the intermediate category.

Like FPA, PIMCO’s star Bill Gross is wary of long Treasuries. With yields on 10-year Treasuries at 3.5 percent, Gross warned that rates could rise another percentage point. For safety, he lowered the duration of his Flagship PIMCO Total Return (PTTAX) to 3.6 years. It was one of the fund’s biggest deviations from the benchmark ever. Partly because of the short duration, Gross lagged 60 percent of his peers during the first 6 months of 2011. That was an unusual spell of poor performance for a manager that habitually finishes near the top of the standings.

Gross says that savers are being pick-pocketed by the Federal Reserve. At a time when inflation is running above an annual rate of 2.5 percent, investors in money markets are receiving next to nothing. To find better values, Gross has been shifting some assets to countries like Germany and Brazil, which have better balance sheets and yields that are not being completely destroyed by inflation.

GMO’s founder Jeremy Grantham is gloomy about both stocks and bonds. With yields puny, U.S. bonds will only return 0.1 percent annually after inflation for the next seven years, GMO forecasts. The firm is also wary of U.S. small caps. After leading the markets for much of the past decade, small stocks are overpriced and should lose 2.7 percent annually after inflation. Unable to find many bargains, GMO Global Balanced Asset Allocation (GMWAX) has 22 percent of assets in cash. During the past year, the big cash stake has been a drag, and the fund trailed 65 percent of its peers in the world allocation category.

In a recent letter to shareholders, Grantham warned that his moves are often early. In 1986, he sold all his Japanese stocks and said that they were overvalued. For the next three years, Tokyo markets soared, and Grantham looked foolish—until Japanese stocks collapsed. In 1998, he began shunning technology stocks. Impatient investors dumped Grantham’s funds, but GMO went on to outperform competitors by a wide margin when the Internet bubble burst. In the current cycle, investors are again showing little patience for a strategy that appears wide of the mark. In the last year, shareholders have pulled $3.4 billion from GMO funds.

Martin Whitman of Third Avenue has become concerned that U.S. stocks are expensive at a time when the economy is sluggish and the dollar is sinking. To find bargains in recent years, Whitman has looked abroad. Third Avenue Value (TAVFX) now has 63 percent of its assets in Asia, with most of those holdings in Hong Kong property companies. This represents a huge change for the fund, which traditionally kept most assets in the U.S.

Although the fund’s holdings may have changed, Whitman says that his strategy has remained the same for two decades. The aim is to buy solid companies that sell for big discounts to their fair values. Over the years, Whitman has scored some remarkable coups. In 1993, he bought Apple Computer and scored huge gains as the company soared in the technology bull market. After stocks crashed in 2000, the fund scooped up depressed shares of telecom equipment makers and made big profits.

So far the move into Asia has produced mixed results. With Chinese stocks soaring in 2009, the fund outpaced most of its competitors in the world stock category. But lately the Chinese markets have cooled as investors worry that the country’s growth could slow. During the past year, Third Avenue trailed 64 percent of competitors. Shareholders have been losing heart. In the past year, withdrawals totaled $1.2 billion. Assets in the fund now stand at $4.8 billion, down from $11.2 billion in 2007.

Third Avenue stands firmly behind its stocks. In a recent shareholder letter, the managers explained that their Hong Kong property companies have little debt and steadily growing earnings. The shares sell for substantial discounts to the net assets of the companies. Whitman could prove to be right, but his fund is only suitable for patient investors who are willing to hold through up and down markets.