Morningstar Advisor - February/March 2009 - (Page 52) Undiscovered Managers Greenspring Comes to the Rescue By Laura Lallos Chip Carlson’s fund has been a safe haven for shareholders during the financial crisis, which continues to turn up deals for the manager. Headquartered between Wall Street and Washington—in a genteel suburban office park in Lutherville, Md.—Greenspring Fund GRSPX has seemed miles away from the fray. Of course, nothing escaped the year’s market maelstrom. That said, the fund’s 14% loss for the year through November was less than half that of the typical moderateallocation fund (not to mention nearly 24 percentage points better than the S&P 500). This is the kind of performance shareholders no doubt hoped for from a fund that positions itself as a defensive play on the stock market. Now the fund is on the offense. On Nov. 21, the day after U.S. automakers were sent home from D.C. with hats still in hand—and the S&P 500 plunged to its lowest close since 1997—manager Chip Carlson and first lieutenant Michael Fusting were in good cheer. In an interview from the small conference room in the company’s modest suite, Carlson enthused, “The adrenaline is pumping! This market is certainly challenging, but every day, we are improving the portfolio.” As hedge funds meeting margin calls fueled selling frenzies, Carlson and Fusting were snapping up short-term corporate bonds and convertibles at double-digit yields. Immune to the Bailout This may sound too good to be true to today’s twice-shy investors, but Carlson brings clarity and confidence to the moves. “It’s hard to envision how this is not a successful strategy—as we’ve been pursuing it,” Carlson says. “We do balance-sheet analysis for significant cash reserves, and much of the 52 Morningstar Advisor February/March 2009
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