Tracking William Nygren’s Harris Associates Portfolio – Q3 2023 Update

In the third quarter of 2023, William Nygren’s Harris Associates portfolio experienced a decrease in value, dropping from $56.60 billion to $51.39 billion. Despite this decline, the portfolio remains diversified, consisting of approximately 200 positions. Alphabet, Charter Communications, Capital One Financial, Intercontinental Exchange, and Fiserv are the five largest holdings in the portfolio. Notably, Harris Associates’ flagship mutual funds, Oakmark Fund and Oakmark International, have consistently outperformed their respective benchmarks, generating substantial alpha. During this period, Nygren’s portfolio saw the introduction of new stakes in Cisco Systems, as well as increases in holdings of Capital One Financial, Intercontinental Exchange, IQVIA Holdings, CNH Industrial, American International Group, CBRE Group, Willis Towers Watson, and Warner Bros. Discovery. Conversely, positions in Alphabet Inc., Charter Communications, Fiserv Inc., and several other companies were reduced.

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Portfolio Overview

In Q3 2023, William Nygren’s 13F portfolio value decreased from $56.60B to $51.39B. Despite this decrease, the portfolio remains diversified with approximately 200 positions. The portfolio’s largest holdings are Alphabet, Charter Communications, Capital One Financial, Intercontinental Exchange, and Fiserv. These top holdings reflect a mix of companies from various sectors, indicating a well-diversified investment strategy.

Performance of Oakmark Fund and Oakmark International

Harris Associates’ flagship mutual funds, Oakmark Fund and Oakmark International, have consistently outperformed their respective benchmarks. These funds have demonstrated the ability to generate substantial alpha, which is the measure of a fund’s excess return compared to its benchmark. The strong performance of these funds underscores the expertise and research-driven investment approach of Harris Associates.

Comparison to Benchmarks

When comparing the performance of the Oakmark Fund and Oakmark International to their benchmarks, the funds have consistently exceeded the market’s performance. This achievement is especially noteworthy given the challenging investment landscape in recent years. The ability to generate alpha suggests that the funds’ investment strategies are delivering strong returns and creating value for their investors.

New Stakes and Stake Increases

In Q3 2023, William Nygren’s portfolio saw the addition of new stakes in Cisco Systems (CSCO) and significant stake increases in Capital One Financial (COF), Intercontinental Exchange (ICE), IQVIA Holdings (IQV), CNH Industrial (CNHI), American International Group (AIG), CBRE Group (CBRE), Willis Towers Watson (WTW), and Warner Bros. Discovery (WBD). These additions and increases reflect a targeted investment approach, capitalizing on potential growth opportunities and favorable market conditions.

Cisco Systems (CSCO)

William Nygren’s portfolio now includes a stake in Cisco Systems (CSCO). Cisco Systems is a multinational technology conglomerate that specializes in networking hardware, software, and telecommunications equipment. The addition of this stake suggests confidence in Cisco Systems’ ability to innovate and maintain its competitive edge in the rapidly evolving technology industry.

Capital One Financial (COF)

William Nygren increased his stake in Capital One Financial (COF) during Q3 2023. Capital One Financial is a bank holding company that offers a wide range of financial products and services. The decision to increase the stake in this company may be attributed to its strong fundamentals, including solid financial performance and a robust business model.

Intercontinental Exchange (ICE)

Another notable stake increase in the portfolio is Intercontinental Exchange (ICE). Intercontinental Exchange is a leading operator of global exchanges and clearinghouses, facilitating trading in various asset classes. The increased investment in Intercontinental Exchange could be indicative of the positive outlook on the company’s ability to capitalize on the growing demand for efficient and transparent financial markets.

IQVIA Holdings (IQV)

IQVIA Holdings (IQV) is a global provider of advanced analytics, technology solutions, and contract research services in the healthcare industry. William Nygren increased his stake in IQVIA Holdings in Q3 2023. This move suggests a belief in the company’s potential for growth, driven by increased adoption of data-driven healthcare solutions and the rising demand for clinical research services.

CNH Industrial (CNHI)

CNH Industrial (CNHI) is a multinational manufacturer of agricultural and construction equipment, trucks, commercial vehicles, and powertrain solutions. The portfolio saw a significant stake increase in CNH Industrial during Q3 2023. This investment decision may be driven by expectations of increased global infrastructure spending and the potential for improved demand for agricultural equipment.

American International Group (AIG)

American International Group (AIG) is a leading global insurance organization providing a wide range of property-casualty and life insurance products. The portfolio saw a stake increase in AIG during Q3 2023. This increase in the stake may be attributed to AIG’s solid financial performance, strong market position, and potential for continued growth in the insurance industry.

CBRE Group (CBRE)

CBRE Group (CBRE) is a commercial real estate services and investment firm. William Nygren increased the stake in CBRE Group during Q3 2023. This decision may reflect confidence in the company’s ability to benefit from the ongoing demand for real estate services, including leasing, property management, and investment advisory.

Willis Towers Watson (WTW)

Willis Towers Watson (WTW) is a global advisory, broking, and solutions company that helps clients navigate risks and optimize benefits. The portfolio saw a stake increase in Willis Towers Watson in Q3 2023. This increase may be driven by expectations of increased demand for risk management and consulting services as businesses strive to navigate an evolving risk landscape.

Warner Bros. Discovery (WBD)

Warner Bros. Discovery (WBD) is a multinational media and entertainment company formed through the merger of WarnerMedia and Discovery, Inc. The portfolio saw a stake increase in Warner Bros. Discovery during Q3 2023. This investment decision may reflect optimism regarding the company’s content library, global reach, and potential for growth in the increasingly competitive streaming and entertainment industry.

Stake Decreases

In addition to the new stakes and stake increases, William Nygren’s portfolio also experienced stake decreases in several companies during Q3 2023. These reductions may be strategic decisions based on various factors, including evolving market conditions, portfolio rebalancing, or changing investment strategies.

Alphabet Inc. (GOOG)

Alphabet Inc. (GOOG), the parent company of Google, saw a stake decrease in William Nygren’s portfolio. This reduction may indicate a reevaluation of the company’s growth potential or a desire to reallocate capital to other investment opportunities.

Charter Communications (CHTR)

Charter Communications (CHTR), a leading telecommunications company, also experienced a stake decrease in the portfolio. The decision to reduce the stake in Charter Communications may reflect a reassessment of the company’s long-term prospects or a desire to rebalance the portfolio with a different sector allocation.

Fiserv Inc. (FI)

Fiserv Inc. (FI), a global provider of financial services technology, saw a stake decrease in William Nygren’s portfolio. This reduction may be driven by factors such as changes in the competitive landscape or a desire to reallocate capital to stocks with greater growth potential.

KKR & Company (KKR)

KKR & Company (KKR), a leading global investment firm, experienced a stake decrease in the portfolio. This reduction may be a result of a reassessment of the company’s investment strategies or a desire to adjust the exposure to the financial services sector.

ConocoPhillips (COP)

ConocoPhillips (COP), an American multinational energy corporation, saw a stake decrease in the portfolio. This reduction may be driven by factors such as changes in the energy sector’s outlook or a desire to adjust the overall exposure to the industry.

Bank of America (BAC)

William Nygren’s portfolio experienced a stake decrease in Bank of America (BAC), one of the largest banking and financial services corporations globally. This reduction may reflect a reevaluation of the company’s long-term growth prospects or a decision to allocate capital to other opportunities within the financial sector.

Amazon.com (AMZN)

Amazon.com (AMZN), the multinational technology giant and e-commerce pioneer, saw a stake decrease in the portfolio. This reduction may be a result of a reassessment of the company’s valuation or a strategic decision to reallocate capital to stocks with greater growth potential.

General Motors (GM)

General Motors (GM), one of the world’s largest automakers, experienced a stake decrease in the portfolio. This reduction may be driven by factors such as evolving trends in the automotive industry or a desire to adjust the exposure to the sector based on changing market dynamics.

Charles Schwab (SCHW)

Charles Schwab (SCHW), a leading brokerage and banking services company, saw a stake decrease in William Nygren’s portfolio. This reduction may reflect a reassessment of the company’s growth potential or a desire to reallocate capital to other investment opportunities within the financial services industry.

EOG Resources (EOG)

EOG Resources (EOG), one of the largest independent crude oil and natural gas exploration and production companies, experienced a stake decrease in the portfolio. This reduction may be driven by factors such as changes in the energy sector’s outlook or a desire to adjust the overall exposure to the industry.

Wells Fargo (WFC)

Wells Fargo (WFC), one of the largest banks in the United States, saw a stake decrease in the portfolio. This reduction may reflect a reassessment of the company’s long-term prospects or a decision to allocate capital to other opportunities within the financial sector.

Salesforce.com (CRM)

Salesforce.com (CRM), a global leader in customer relationship management (CRM) software and cloud computing, experienced a stake decrease in William Nygren’s portfolio. This reduction may be driven by factors such as changes in the competitive landscape or a desire to rebalance the portfolio with a different sector allocation.

Oracle Corp (ORCL)

Oracle Corp (ORCL), a multinational computer technology corporation, saw a stake decrease in the portfolio. The decision to reduce the stake in Oracle may be a result of a reassessment of the company’s growth potential or a desire to reallocate capital to other investment opportunities within the technology sector.

Reduction in Small Stakes

In addition to the stake decreases in the aforementioned companies, William Nygren’s portfolio also saw reductions in several smaller positions. While these reductions may not individually have a significant impact on the portfolio’s overall performance, they suggest a continuous evaluation of the portfolio’s holdings and a focus on optimizing returns.

Other Stake Decreases

Alongside the reduction in small stakes, there were other stake decreases in the portfolio that may reflect strategic decisions based on changing market conditions, company-specific developments, or broader shifts in investment strategies. These reductions underscore the dynamic nature of portfolio management and the importance of regular evaluation and adjustment to optimize performance.

In conclusion, William Nygren’s portfolio saw a decrease in value in Q3 2023, but it remains diversified with a mix of holdings across various sectors. The performance of Harris Associates’ flagship mutual funds, Oakmark Fund and Oakmark International, continues to outpace their respective benchmarks, highlighting the expertise and research-driven investment approach of the firm. The addition of new stakes and stake increases in companies such as Cisco Systems, Capital One Financial, and Intercontinental Exchange reflects a targeted investment strategy, while the stake decreases demonstrate a willingness to reassess and adjust the portfolio based on changing market dynamics. Overall, the portfolio’s composition and performance indicate a disciplined and proactive approach to investment management.

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