Robert Bruce Portfolio

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HFA Staff
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A legend in the value investing world, Robert Bruce has a career spanning over four decades. After he graduated Columbia Business School in 1970 he worked as an analyst in Wall Street. Later he founded Bruce Fund which has constantly delivered higher returns compared to the S&P 500 index. Robert Bruce’s portfolio currently consists of 36 holdings valued at $282 million.

Key holdings in his portfolio include U Haul Holding Company Series N, Abbvie Inc., Allstate Corp., Merck & Co., and Duke Energy Corp. His recent major trades include trimming the Pfizer holding by 48.3%, and a 100% increase in a Darling Ingredients Inc. Holding.

Bruce’s portfolio is diversified in the Utilities, Healthcare, and Industrial sectors. Companies from the Finance, and Telecommunication sectors also hold a significant part in his portfolio. Bruce is known for his ability to find bargains in the market. That combined with his focus on the fundamentals made a perfect recipe for value investing in the 21. century.

Key Takeaways

  • Robert Bruce has been in the investment business since the 1970s
  • Value investing with a keen eye for undervalued securities is Bruce’s preferred approach throughout his career
  • His portfolio is valued at $282 million
  • Currently, there are 36 holdings in his portfolio
  • Bruce’s fund is focused on the Healthcare, Industries, and Utilities industries
  • Out of the last five years, his fund only once beat S&P 500 index.

Key Holdings

U Haul Holding Company Series N (NYSE:UHAL.B) with 13.39% of the portfolio

UHAL.B is a holding dating to Q4 2022 when Bruce bought 661 thousand shares at $55. Since then he sold 120 thousand shares, while the remaining holding is worth $34.1 million. The entire stake at the company was paid $29.5 million, generating a gain of 16%.

Merck & Co. (NYSE:MRK) with 8.53% of the portfolio.

Bruce Fund currently owns 220 thousand Merck & Co. shares that are valued at $24 million. Since the beginning of 2024, the stock price increased from $110 to $127, while Bruce bought them at $49 on average.

Abbvie Inc. (NYSE:ABBV) with 7.53% of the portfolio

Abbvie, a pharmaceutical company based in Chicago, is one of the long-term investments in Bruce’s portfolio. He traded their shares for more than 15 years, generating a solid surplus. Over the years he invested a total of $8.46 million, while the stake is now worth $23.4 million. After reductions in 2023, this holding has 138 thousand shares, while it generated a gain of 177%.

Duke Energy Corp. (NYSE:DUK) with 6.97% of the portfolio

In a decade of trading Duke Energy stocks, Bruce managed to generate a 35% gain. Bruce bought their shares at an average of $72, while the current price is $98. In the last five years, he has been slowly selling his stake, reducing it to 204 thousand shares. The current value of the holding is $20 million, while the investment cost is $15 million.

CMS Energy Corp. (NYSE:CMS) with 6.46% of the portfolio

Bruce started to build up his position in CMS Energy in 2014 and since then he invested $10.8 million. After the trimmings from recent years, he owns 316 thousand shares valued at $18.9 million. Bruce on average paid $34.3 for their shares while their present value is $60. Despite a minor drop in price in 2023 this holding managed to generate 75% gains since 2014.

Xcel Energy Inc. (NASDAQ:XEL) with 6.39% of the portfolio

Xcel Energy is going through a massive drop in its share value. From late 2022 when it was valued at $73 it has slowly been losing ground. In 2024 it fell to a record $48 low, while it managed to get some of its value back to its current $55. Bruce owns 293 thousand shares valued at $16.2 million. His average buy price of this company share was $34 so he is still managing to generate positive returns. Bruce’s investment of $10.1 million generated a gain of 61% over a decade of trade. 

NextEra Energy Inc. (NYSE:NEE) with 6.28% of the portfolio

Currently, Bruce’s NextEra holding has 293 thousand shares valued at $17.83 million. Like with other long-term investments after a big initial investment, Bruce opts for slowly trimming the holding. In the last year, he sold about 50 thousand shares, while the price slowly regained value after a drop in October 2023.

Allstate Corp. (NYSE:ALL) with 6.27% of the portfolio

When he finds a good investment Bruce is keen on holding onto it. That is also the story with Allstate Corp. Bruce Fund has had an active stake in the company for more than 15 years, and it proved to be a very good investment pick. On average, he paid for their stock $58.9 while the price today is $175. Bruce invested a total of $7.5 million while the holding value increased to $22.3 million. This came with a gain for investors of 198% so far.

Abbott Labs (NYSE:ABT) with 5.81% of the portfolio

Abbott Labs is one of the great early picks made by Bruce. He built up the holding while buying stocks on average of just $41.5. He now owns 150 thousand stocks valued at $16.1 million. While Bruce invested a total of $6.23 million this investment generated a gain of 159%.

AT & T Inc. (NYSE:T) with 5.68% of the portfolio

AT&T is the first major Bruce’s holding that is in the red. He currently owns 961 thousand shares worth an estimated $16.13 million. The average buying price is $22.94 while the current price is $16.80. 

Sector Allocation

Robert Bruce’s portfolio is primarily allocated to the Healthcare, Utilities, and Industrial sectors. Besides those, he invests in the Telecommunication, Financial, and Consumer sectors. This is the current sector allocation for the Bruce Fund portfolio:

  • Healthcare with 31.26% of the portfolio valued at $87.42 million
  • Utilities with 28.90% of the portfolio valued at $81.50 million
  • Industrials with 19.85% of the portfolio valued at $56.1 million
  • Telecommunication with 6.83% of the portfolio valued at $19.1 million
  • Financials with 6.40% of the portfolio valued at $18 million
  • Technology with 2.87% of the portfolio valued at $7.9 million
  • Consumer Defensive with 2.47% of the portfolio valued at $6.75 million
  • Materials with 1.47% of the portfolio are valued at $4 million.

Robert Bruce Investment Philosophy & Strategies

Value Investing Pioneer

Bruce’s two cornerstones of his investment strategy are finding undervalued securities, and rallying on fundamental analysis

His first step in the investment process is to identify between 50 and 100 companies that have financial characteristics that he likes. Then he practices his patience in waiting for them to go on sale.

To identify companies that can deliver in the long term he combines the elements of fundamental analysis with behavioral finance. He found that using these approaches it is possible to identify discrepancies between market perception and intrinsic value.

Like most value investors, Bruce is looking ahead and avoiding making short-term bets. According to him, it is impossible to predict short-term price movements, and he rarely takes them into account.

Following in the footsteps of other great value investors Bruce is a contrarian in heart. Trends that are blindly followed are something that he never understood. If a specific security is currently on the rise, that doesn’t mean that the trend will continue.

While the majority of investors get lost in volatile periods Bruce thrives in them. He says that every value investor can find a great pick while the prices are moving. All you need to know is the real value of the company. Then it is hard to make a mistake.

Risk Management

The first level of defense from potential losses is buying at discount prices. The second is fundamental analysis with which Bruce attempts to predict the future potential of the investment. Then he holds onto the stock until it reaches its full potential.

His large holdings like Abbvie, Allstate Corp., and Abbott Labs show that this approach can deliver significant gains. 

Robert Bruce Performance Analysis

Historical Performance

With the available historical data, Robert Bruce’s portfolio generated a cumulative 35-year gain of 3640%. In the same period, the referent index S&P 500 generated only 1598% returns. Bruce’s best-performing years were between 2000 and 2004. Converted into annual gains Bruce’s investors got 10.9% in this time frame.

In the last 15 years, the fund delivered mixed results. Between 2009 and 2023 the S&P 500 delivered 472%, or 11% annual returns. At the same time, Bruce Fund delivered 332% or 7.54% annual gains. 

In the last decade, his fund outperformed the index on just four occasions, in 2014, 2015, 2018, and 2022. In 2022 the fund ended with -8.7%, and in 2023 with -0.74%. 

Notable Success

Apple Inc. Holding

Apple has been a part of Bruce’s portfolio since 2018. In that period he bought about 400 thousand shares at $43. He slowly trimmed down the holding over the years to a current 35 thousand shares. His initial investment of $1.51 million generated a gain of 293%.

Allstate Corp Holding

An investment of $7.5 million has turned into $22 million in 15 years. This investment is a direct example of Bruce’s value investing strategy of buying at a discount and holding while the price increases.

Notable Failure

IGM Biosciences Inc. Holding

An initial $2.5 million investment turned sour in a three-year period. Bruce sold about half of 120 thousand stocks, while its current value fell from an initial $78 to under $9 per share.

Kinross Gold Corporation Holding

While the loss is not a major one when calculated in dollars, it is still a completely missed investment. In 2013 Bruce bought 345 thousand shares at $8 per share. Two years later he exited from the holding selling an entire stake for $2 per share.

Future Outlook

When looking at the performance in the last three years, Bruce’s Fund cannot brag about its impressive results. On the contrary, his fund delivered a three-year cumulative return of just 6.3%, while the S&P 500 index outperformed it with 27% returns. Out of the last five years, the fund outperformed the index only once.

It doesn’t look that Bruce will change his approach, due to the fact that he is sticking with his big players. Since 2021 the AUM has fallen from $1 billion to a current $282 million without any major disproportion in the sell/buy distribution. 

Some of the key players in his portfolio are manufacturers of electric power. There are signs that the demand for power will likely increase which would propel the value of these companies. In that regard, it is worth waiting out how things will play out in the future.

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The post above is drafted by the collaboration of the Hedge Fund Alpha Team.