Aim Leisure Fund helped by Hilton, Comcast
Mark Greenberg's Aim Leisure Fund returned almost twice as much as the Standard & Poor's 500 index in the past year as consumers around...
Mark Greenberg's Aim Leisure Fund returned almost twice as much as the Standard & Poor's 500 index in the past year as consumers around the world spent more on travel, liquor and entertainment.
The $886 million mutual fund rose 27 percent through Feb. 6, compared with 17 percent for the S&P 500, making it the top performer of eight leisure and entertainment funds tracked by Bloomberg.
Greenberg's biggest holdings include Hilton Hotels, brewer Carlsberg and cable-television company Comcast. All three climbed more than 45 percent in the past 12 months.
Greenberg, who has run the Aim fund since 1996, almost doubled his stake in lodging stocks to 16 percent of assets in the past five years as fewer hotels were built.
Now he's adding to casino and liquor holdings because consumers are gambling more than ever in Las Vegas and Macau, and buying more Absolut vodka at $40 a bottle, he said.
"I don't try to predict the economy, the stock market or interest rates," Greenberg said from his office at Aim Investments in Denver. Instead, he said he focuses on earnings prospects.
Rising incomes will make China the world's top consumer of luxury goods in less than a decade, according to analysts at New York-based Goldman Sachs Group. Management consultants at McKinsey & Co. estimate there will be 351 million middle-income Indians in 65 million households by 2010, up from 40 million households today.
With more disposable income in the most populous nations, the number of tourist visits worldwide rose to a record 842 million last year, the World Tourism Organization said.
The Chinese and Indian economies probably will expand 9.2 percent this year, economists estimate. U.S. Treasury Secretary Henry Paulson expects the U.S. economy to grow about 3 percent.
Greenberg doubled his holdings in brewers and distillers to 8 percent since 2001. U.S. liquor sales climbed 6.3 percent to a two-year high of $17 billion in 2006, driven by so-called super-premium vodka and whiskey, according to the Distilled Spirits Council of the U.S. Vodka sales rose 11 percent to $4 billion.
Morningstar, a Chicago-based industry research firm, gives Aim Leisure its highest rating of five stars. The fund has a Sharpe ratio of 0.89, compared with 0.54 for funds that invest in large-company growth-style stocks. A higher Sharpe ratio means better risk-adjusted returns.
"Our main concern is what would happen to the fund if the tide turns, and the consumer economy takes a back seat to the general economy," Morningstar analyst Karen Wallace wrote in a report to clients.
The Aim Leisure Fund fell 1.2 percent in 2005 after a slump in housing and higher energy prices depressed consumer spending.
Hurricane Katrina, which devastated the U.S. Gulf Coast in August 2005, crimped spending on hotels and leisure activities.
The fund's top holding is Omnicom Group, the world's largest advertising company.
Aim Leisure's No. 2 holding is Rupert Murdoch's News Corp., based in New York. The third-biggest holding is casino operator Harrah's Entertainment of Las Vegas.
Greenberg started loading up on hotel stocks after construction stopped after the Sept. 11, 2001, terrorist attacks in Manhattan. In New York, hotel occupancy is at a record 84 percent, and the average room rate is $241 a night, according to accounting firm PricewaterhouseCoopers.