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Top Fund Manager - John Neff


If you want to study one of the best mutual fund managers since the 1970s, John Neff is the perfect subject. He is well known for his value investing and contrarian investing styles.

 

Born in 1931 in Ohio, John Neff had a reputation for being tactical, so he later brought this to the mutual fund market. This is not after attending both Case Western Reserve University and the University of Toledo, which would put him on his way to being the head of Vangard's Windsor Fund.

 

During Neff's tenure, the Windsor Fund was the best performing mutual fund in the 1980s and the largest fund that closed to new investors. From 1964 to 1995 the Windsor fund returned better percentages than the S&P 500 itself did. The average annual return for the S&P 500 was 10.6%, while the Windsor returned an annual percentage of 13.7% to its investors.

 

As for why John Neff was such an investment success, not only was he tactical in how he approached a fund, but he was also analytical. He would take a look at a company and immerse himself in their books to ensure there were no glitches within the company's accounting that would make it a bad investment. This was referred to as "low-tech security analysis."

 

The strategies that John Neff used resulted in turnovers with holding periods of approximately 3 years. And just like Warren Buffet, a very savvy and the most revered investor in recent history, John Neff emphasized that Return on Equity is the best way to measure the success of a management team within a company. He did, however, differ from many investors in that he projected a company's earnings based on their books and also looked at the state of the economy.

 

In 2001, John Neff published a book about his investment strategies and a Wharton School named a professorship after him.

 

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