Why I Own the Bruce Fund

I have a small position in the Bruce Fund (BRUFX). It is the only actively managed fund I own. BRUFX is a mutual fund run by the father and son team of Robert and Jeffrey Bruce. It has been around 29 years. Its long term track record puts BRUFX in the top 1% of mutual funds in its category. The following table shows this so clearly.

Date	1YR	5YR	10YR	29YR
BRUFX	1.0%	3.6%	16.6%	12.4%
S&P 500	5.5%	0.2%	5.3%	9.9%

This is one of the best-of-the-best mutual funds for long term.

The fund is has about $350M under management. So this is a medium to small fund. And Bruces are very modest. As far as I know, they don't advertise. They don't have brokers. They don't give interviews. So there is very little media coverage.

Their investment style is conservative allocation. So I consider BRUFX as a hedge against the general market. It is a defensive play; and the fund allocation shows that. As of their last report, it has only 41% of their fund in common stocks. The rest are a mixed bag of bonds and preferred shares. And their stocks are mostly names I have never hard of. I have always believed in taking firm control of my investments to learn and to save fees. But BRUFX is one exception. BRUFX is truly providing a service that I cannot emulate. And it goes against the grain to be consistent in good and bad markets. I bought BRUFX in early 2008, just before the financial crash. And from then to now, they have gained around 40%, while the market has about broken even.

A person considering buying BRUFX should know that their management fee is below industry average at 1%. But to invest in BRUFX one must open an account with their custodian. So one cannot invest in BRUFX with just any broker. Their custodian is Huntington National Bank, this means that a reputable company manages the funds money and keeps their books. Their auditor is Grant Thornton. So this is unlike Bernie Madoff's fund which had Madoff as custodian, clearing house and in control of the auditor.