Michael Brush: ‘The sharks are still there.’ Stock market’s decline is just beginning, this top fund manager says

by | Aug 21, 2023 | Stock Market

“ ‘There are times when you want to bet against consensus, and now is one of those times.’ ”

— Eli Salzmann

If August’s stock-market weakness has you concerned, brace yourself because it’s going to get a lot worse. That’s the outlook of Eli Salzmann, who manages the Neuberger Berman Large Cap Value Fund NPRTX. While most investors have migrated to the “soft landing” and “no landing” camps, Salzmann holds steadfast to his belief that a recession is on the way. 

Why should you care what he thinks? Because where most mutual fund managers have a tough time beating the U.S. market, Salzmann’s $12.6 billion fund outperforms nicely over the past three- and 10 years, according to Morningstar Direct.  Much of that long-term outperformance comes from out-of-consensus forecasts about macro trends — like the one behind his current cautionary stance.  “The economy is heading south in the next six to nine months,” he told me in a recent interview. “Make sure your portfolio is very defensive and protects on the downside, because the downside isn’t going to be pretty.” If you are looking for defensive names to consider, here’s how Salzmann is positioned for what he expects will play out.  Top holdings include “steady Eddie” consumer staples names including Procter & Gamble
Philip Morris International
and beverage and snack giant Mondelez International
The fund also has substantial positions in utilities including Duke Energy
and Exelon
and mature healthcare giants Johnson & Johnson
and Pfizer
Salzmann recently had 18.8% of the fund’s portfolio in consumer d …

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