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Smooth Sailin'

This fund navigates well, even in rough waters.

Look through the record books, and you won't find many funds whose portfolio managers have been at the helm since inception-or that have a record spanning a couple of decades that ranks tops in performance. The Clipper Fund, however, scores on all three counts.

James H. Gipson started the Clipper Fund in 1984 and has steered this nondiversified fund through bear and bull markets ever since. Year to date through December 8, 2003, the fund was up 14.02 percent for 2003. Since inception, its average annual total return is 15.7 percent.

When selecting stocks for the fund's portfolio, Gipson looks for value. "Our perspective is not so much what it will earn next quarter or next year, but the worth of the business to a rational private buyer," he says. The fund uses valuation models to determine that worth. Then, once a stock rises to its intrinsic value (the price Gipson and his team estimate its worth at), it gets sold.

Typically, you'll find between 20 and 35 securities in the Clipper Fund portfolio. The fund's price of admission is high-$25,000 is the minimum for opening a regular account. But decide to add this fund to a qualified retirement account, and you'll need only $3,000. Even better, automatic investment plans can be started with a commitment of $150 per month after the initial minimum is invested. That's pretty attractive for a fund that has stayed the course throughout most of its life.


Dian Vujovich is an author, syndicated columnist and publisher of fund investing site www.fundfreebies.com.

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This article was originally published in the March 2004 print edition of Entrepreneur with the headline: Smooth Sailin'.

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