Debunking Ken Fisher: Performance, Fees, Net Worth

Billionaire Ken Fisher is one of the most well-known money managers and not just in the financial world. He runs a prestigious Forbes column, titled “Portfolio Strategy”, which he has been writing since 1984, which makes him the longest-running columnist in the publication’s history. He also has written 11 books, four of which became New York Times bestsellers and has published many papers. However, Mr. Fisher, who has a net worth of around $3.6 billion, is mainly known as the founder, chairman, and ex-CEO of Fisher Investments, a financial adviser with offices in the US, England, and Germany.

Fisher Investments was founded in 1979 and Ken Fisher had served as the company’s CEO until 2016, when he was succeeded by Damien Ornani. Mr. Fisher still has an active role at the company, as he is executive chairman and co-chief investment officer. Fisher Investments has around $83 billion in Assets Under Management and is one of the largest wealth managers in the US. Mr. Fisher managed to grow his fund to such big proportions through aggressive advertising. Fisher Investments is one of the most advertised investment advisors and the company often sends letters, e-mails, and makes phone calls to clients, directly advertising its products. In addition to advertising, the growth of Fisher’s AUM figure was helped by the fact that it caters to wealthy people, with an investment minimum of $500,000. The fund charges a flat fee that varies between 1% and 1.5% depending on the size of the portfolio.

Mr. Fisher’s performance was calculated by Forbes, based on his public stock picks revealed in his columns. The publication estimated in 2015, that over the previous 18 years, Mr. Fisher outperformed the broad US stock market by an average of 4.2 percentage points annually. Meb Faber, the co-founder and CIO of Cambria Investment Management, also looked through Fisher’s returns in an article posted on his blog. Between 1995 and 2014, Mr. Fisher’s picks lagged behind the MSCI World Index in 10 years, including four consecutive years between 2011 and 2014.

At Insider Monkey, we also calculated Fisher Investments’ performance by taking into account the fund’s positions disclosed in quarterly 13F filings with the Securities and Exchange Commission. We only took into account the fund’s long positions in companies worth over $1.0 billion. According to our estimates, Fisher Investments had 466 holdings in companies with market caps above $1.0 billion had a weighted average return of 4.6%, which is higher than the S&P 500’s gain of 2.6%. For the first six months, the fund’s returns amounted to 11.97%, above the Index’s gain of 8.24%. In the same fashion, Fisher’s holdings returned 7.4% in 2015, which was significantly higher than the S&P 500’s decline of 0.70%.

Fisher Investments is not the only fund that we track. Our database contains over 650 hedge funds and other institutional investors, whose quarterly 13F filings we analyze as part of our investment strategy (see more details). Aside from using data from 13F filings, our readers can also subscribe to their favorite investors and receive real-time alerts on any updates they disclose with the SEC. This feature is offered for free for everyone who signs up on our website, and requires just adding the funds to the follow list.

Fisher Investments’ last 13F filing revealed an equity portfolio worth $66.32 billion as of the end of June. The portfolio, which contains over 750 positions, is highly diversified across sectors, with Financial stocks amassing the largest share, 34%, followed by Technology, which accounts for 23%. In this article, we are going to take a look at some of the Fisher’s top picks.

1. Amazon.com, Inc. (NASDAQ:AMZN)

Amazon.com, Inc. (NASDAQ:AMZN) was Fisher’s second-largest holding at the end of the second quarter, in which the fund cut its stake by 16% to 1.70 million shares worth $1.65 billion. The eCommerce giant’s stock has had a great run, amid the strong growth registered by the company. Amazon.com, Inc. (NASDAQ:AMZN)’s cloud platform, AWS, is the market leader, with a share of 34%, trailed by a far margin by Microsoft Corporation (NASDAQ:MSFT) with a share of 11%, according to Synergy Research. Amazon.com, Inc. (NASDAQ:AMZN) has also acquired Whole Foods, which allows it to compete in the grocery retail business, where it has all the resources to stay ahead of competition, and which it can use to expand its Prime membership and offer grocery deliveries cheaper and faster. At the end of June, Amazon.com, Inc. (NASDAQ:AMZN) was the second most-popular stock among the funds we track at Insider Monkey, with 132 investors long the stock, up from 129 funds a quarter earlier.

2. Johnson & Johnson (NYSE:JNJ)

On the other hand, in Johnson & Johnson (NYSE:JNJ), Fisher Investments increased its stake by 3% to 11.50 million shares valued at $1.52 billion during the second quarter. The pharmaceutical giant has recently announced several positive results from its trials. Its Xarelto blood thinner showed a reduction in the risk of major cardiovascular events in combination with aspirin. In other news, the company has been under pressure, alongside its other peers in the pharmaceutical industry, from the government, regarding high drug prices. At the end of August, Michigan state legislators introduced a bill that would require drug makers to justify price hikes, joining several other states that took similar actions to address price hikes. There were 72 funds in our database long Johnson & Johnson (NYSE:JNJ) at the end of the second quarter, up by two compared to the end of March.

3. Apple Inc. (NASDAQ:AAPL)

Fisher Investments also reduced its holding in Apple Inc. (NASDAQ:AAPL) by 9% on the quarter to 10.56 million shares worth $1.52 billion at the end of June. Last week, Apple Inc. (NASDAQ:AAPL) sent out invites to a launch event, where it is expected to announce its new iPhone 8. Analysts expect that the tech giant will also reveal an update to its current iPhone 7, the iPhone 7S and 7S Plus and a new Apple Watch. Previously it was reported that the new Watch will have cellular connectivity via an embedded SIM, which will allow its users to make calls, send or receive texts without being connected to an iPhone. During the second quarter, the number of funds tracked by us that hold shares of Apple Inc. (NASDAQ:AAPL) increased to 115 from 113.

4. Visa Inc (NYSE:V)

In Visa Inc (NYSE:V), Fisher Investments’ position was increased by 2% between April and June. Heading into the third quarter, the fund held 15.62 million shares worth over $1.46 billion. Visa Inc (NYSE:V)’s stock has advanced by over 33% since the beginning of the year, amid the payments technology posting reporting better-than-expected results and annual revenue growth of over 20% for the last three quarters. For the second quarter of 2017, Visa Inc (NYSE:V) reported EPS of $0.86, which beat the consensus estimate of $0.81, while its revenue of $4.56 billion went up by 25.6% on the year and topped the estimates by $200 million. Visa Inc (NYSE:V) also projected full-year EPS growth at around 20%. Among the funds in our database, 115 investors disclosed long positions in Visa Inc (NYSE:V) as of the end of June, compared to 110 funds a quarter earlier.

5. Alibaba Group Holding Ltd (NYSE:BABA)

Ken Fisher’s fund also added 4.81 million shares to its holding in Alibaba Group Holding Ltd (NYSE:BABA) during the second quarter and disclosed a $1.45 billion stake containing 10.32 million shares. Alibaba Group Holding Ltd (NYSE:BABA) has been expanding its presence in the brick-and-mortar space, having acquired department store chain Intime Retail for $2.6 billion earlier this year. Last week, it was reported that it plans to convert 10,000 mom-and-pop convenience stores into Tmall.com outlets, where consumers will be able to pick up packages ordered online and even receive loans provided by Ant Financial, which was spun-off from Alibaba Group Holding Ltd (NYSE:BABA) in 2014. As Alibaba Group Holding Ltd (NYSE:BABA)’s stock surged by over 60% in the first six months of 2017, smart money investors grew fonder of it. During the second quarter, the number of funds from our database long the stock advanced by 19 to 116. A quarter earlier, this number went up by 11.

Disclosure: none