Monitoring Jeremy Grantham’s GMO Capital Portfolio – Q3 2023 Replace (MUTF:GBMFX)

This text is a part of a sequence that gives an ongoing evaluation of the adjustments made to GMO’s 13F inventory portfolio on a quarterly foundation. It’s based mostly on GMO’s regulatory 13F Kind filed on 11/13/2023. Jeremy Grantham’s 13F portfolio worth decreased ~2% from $21.60B to $21.17B this quarter. The portfolio is diversified with current 13F experiences exhibiting properly over 500 totally different positions though most of them are very small. There are 39 securities which can be considerably giant (greater than 0.5% of the portfolio every) and they’re the main focus of this text. The most important 5 stakes are Microsoft Company, UnitedHealth, Alphabet, Johnson & Johnson, and Meta Platforms. They add as much as ~17% of the portfolio. Please go to our Monitoring Jeremy Grantham’s GMO Portfolio sequence to get an concept of their funding philosophy and our final report for the fund’s strikes throughout Q2 2023.

As of September 30, 2023, GMO’s 7-year asset class actual return forecast is for US Giant Cap asset class to have a detrimental 2% annualized return on one finish and Rising Worth asset class to have a optimistic 6.6% annualized return on the different excessive. The agency at the moment has ~$75B beneath administration, a far cry from ~$120B that that they had on the peak. The property are distributed amongst individually managed, institutional, and mutual fund accounts. Their flag ship mutual fund is GMO Benchmark-Free Allocation Fund (MUTF:GBMFX) which was incepted in 2003.

Observe 1: It was reported in December 2020 that Jeremy Grantham has a ~4.8M share stake in QuantumScape (QS). The ~$12.5M funding was made 8 years in the past as a part of a sequence of bets on early-stage “inexperienced know-how” firms.

Observe 2: Jeremy Grantham has repeatedly stated the US inventory market is in a bubble since June 2020. The newest was in a WealthTrack interview in July. His estimate of the chance of a market crash has gone down from about 85% prone to 70% probably.

Stake Will increase:

UnitedHealth Group (UNH): The highest three 3.65% of the portfolio stake in UNH was already a really giant ~18M share place in 2005. The place measurement peaked in 2007 at over 20.5M shares. The 5 years by means of 2019 had seen a ~75% promoting at costs between $102 and $296. That was adopted with a ~25% discount in Q2 2022 at costs between ~$452 and ~$546. The final quarter noticed a ~20% stake improve at costs between ~$458 and ~$526. The inventory is now at ~$540. This quarter additionally noticed a ~13% stake improve.

Alphabet Inc. (GOOG): GOOG is a 3.11% place. The long-term stake was constructed through the 2007-2014 timeframe at low costs. The place measurement peaked in 2014. Since then, the stake was diminished at costs between ~$25 and ~$150. There was a ~25% stake improve throughout Q1 2023 at costs between ~$87 and ~$109. The inventory at the moment trades at ~$139. There was marginal trimming final quarter and a minor ~2% improve this quarter.

Johnson & Johnson (JNJ): JNJ is a really long-term stake. Of their first 13F submitting in 2005, the place was at ~170K shares. The sizing peaked at round 26M shares in 2009. The stake was bought down by ~40% in 2014 at costs between $88 and $109. 2016 noticed one other ~50% promoting at costs between $97 and $125. Current exercise follows. H2 2019 noticed a 23% stake improve at costs between $127 and $146. There was one other one-third improve in Q3 2022 at costs between ~$161 and ~$180. That was adopted by a ~25% additional improve during the last two quarters at costs between ~$154 and ~$175. The inventory at the moment trades at ~$151 and the stake is at 2.75% of the portfolio.

Apple Inc. (AAPL): AAPL is a high 5 2.50% long-term stake. It was a big stake in 2005 however was bought down subsequent 12 months. The place was rebuilt in 2007 however was once more bought down subsequent 12 months. Comparable buying and selling sample continued over the subsequent a number of years. The 4 years by means of 2019 noticed a ~75% discount at costs between ~$23 and ~$82. Q3 2020 noticed one other ~30% promoting at costs between ~$91 and ~$134. That was adopted with a ~20% discount throughout Q3 2022 at costs between ~$137 and ~$175. The inventory is now at ~$191. The final three quarters noticed minor trimming whereas this quarter noticed a marginal improve.

Accenture plc (ACN): ACN turned a big a part of the portfolio through the 2013-2014 timeframe when round 3.8M shares have been bought at costs between $69 and $85. The subsequent 5 years noticed a mixed ~50% discount by means of minor promoting most quarters. The 2 quarters by means of Q3 2021 noticed one other ~24% discount at costs between ~$295 and ~$415. The final two quarters noticed a ~27% improve at costs between ~$246 and ~$324. The inventory at the moment trades at ~$330 and the stake is at 2.24% of the portfolio. There was a marginal improve this quarter.

Oracle Company (ORCL): The two.22% ORCL place is a really long-term stake. The place was already at round 14M shares in 2007. The subsequent two years noticed the stake constructed to a a lot bigger 62M share place at costs between $15.50 and $24.50. Subsequent few years noticed promoting at larger costs and by 2017 the stake was again at 14M shares. The 5 quarters by means of Q2 2019 noticed one other ~45% promoting at costs between $44 and $57. Q1 2020 additionally noticed a ~18% discount at costs between ~$40 and ~$56. The three quarters by means of Q2 2022 noticed one other ~30% promoting at costs between ~$64 and ~$104. The inventory is at the moment at ~$116. The final a number of quarters noticed minor trimming whereas this quarter there was a marginal improve.

Merck & Co. (MRK): MRK is a really long-term stake. In 2014, it was bought right down to a really small place at costs between $50 and $62. The stake was rebuilt in H1 2018 at costs between $53 and $63. Q1 2020 noticed a ~20% promoting at costs between ~$66 and ~$92. The seven quarters by means of Q1 2022 had seen a ~30% stake improve at costs between ~$69 and ~$88. There was a ~20% discount subsequent quarter at costs between ~$84 and ~$95.The final quarter noticed the same improve at costs between ~$106 and ~$118. That was adopted by a ~11% improve this quarter. The inventory at the moment trades at ~$102, and the stake is at 1.96% of the portfolio.

Texas Devices (TXN): TXN is a 1.91% of the portfolio place. The vast majority of the stake was bought in Q3 & This fall 2016 at costs between $63 and $75. There was a ~20% stake improve in Q1 2022 at costs between ~$163 and ~$191. The inventory at the moment trades at ~$153. The final 5 quarters noticed solely minor changes whereas this quarter there was a ~15% improve at costs between ~$157 and $183.

Elevance Well being (ELV): ELV place was first bought in 2014. The majority of the present 1.83% portfolio stake was established in 2017 at costs between $144 and $232. There was a roughly one-third promoting in H1 2022 at costs between ~$428 and ~$530. There was a ~16% stake improve final quarter at costs between ~$436 and ~$496. The inventory at the moment trades at ~$471. This quarter additionally noticed a ~7% improve.

Coca-Cola (KO): KO is a 1.83% of the portfolio stake. The place was already a big 7M share stake in 2005. That authentic stake was constructed to 23.7M shares through the 2007-2008 timeframe at worth between $20 and $32. The sizing peaked at virtually 39M shares in 2012. The subsequent 5 years noticed the place bought down by ~90% to a ~3.7M share stake at costs between $37 and $47. Current exercise follows. Q1 2020 noticed a ~75% stake improve at costs between $37.50 and $60. That was adopted with a ~37% improve in Q3 2020 at costs between ~$44 and ~$51. Q2 2022 noticed the same discount at costs between ~$59 and ~$66. The inventory is now at ~$58. The final 4 quarters noticed solely minor changes whereas this quarter there was a ~18% stake improve at costs between ~$56 and ~$63.

Abbott Labs (ABT): The ABT stake noticed a ~ 28% improve this quarter at costs between ~$95 and ~$114. The inventory is now at ~$102.

Wells Fargo (WFC): The 1.50% WFC place was bought in Q3 2017 at costs between $49.50 and $56. Q1 2020 noticed a ~25% stake improve at costs between ~$25 and ~$49. That was adopted with a ~30% stake improve in This fall 2020 at costs between ~$21 and ~$30. There was a ~18% promoting over the subsequent two quarters at costs between ~$30 and ~$48. This fall 2022 noticed one other ~27% discount at costs between ~$40 and ~$48. The inventory is now at $42.60. There was a ~12% improve throughout Q1 2023 whereas final quarter there was the same discount. There was a minor ~3% improve this quarter.

U.S. Bancorp (USB): USB stake was bought in 2017 at costs between $50 and $56. Q1 2020 noticed a ~50% stake improve at costs between ~$29 and ~$55. There was a ~30% promoting throughout Q1 2023 at costs between ~$33 and ~$50. The final quarter noticed a ~17% improve at costs between ~$29 and ~$36. That was adopted by a ~12% improve this quarter at costs between ~$32 and ~$40. The inventory is now at ~$37, and the stake is at 1.39% of the portfolio.

Intuitive Surgical (ISRG): ISRG is a 1.25% of the portfolio place bought in Q2 2022 at costs between ~$191 and ~$306. The inventory at the moment trades at ~$312. There was a ~50% stake improve final quarter at costs between ~$254 and ~$342. This quarter noticed a minor ~2% improve.

American Specific (AXP), Darling Components (DAR), Cigna (CI), Constellation Manufacturers (STZ), Inexperienced Plains (GPRE), Common Electrical (GE), Kosmos Power (KOS), Novartis (NVS), Otis Worldwide (OTIS), Quest Diagnostics (DGX), SolarEdge Applied sciences (SEDG), Sunrun Inc. (RUN), Salesforce.com (CRM), and Visa Inc. (V): These small (lower than ~1.5% of the portfolio every) stakes have been elevated through the quarter.

Stake Decreases:

Microsoft Company (MSFT): MSFT is at the moment the highest place within the portfolio at 4.34%. It’s a very long-term stake. The 2007-2008 interval noticed the stake construct from ~5.6M shares to over 59M shares at costs between $19 and $35. The place measurement peaked in 2011 at ~68M shares. The subsequent 4 years noticed the stake bought down by ~80% at costs between $28 and $56. Current exercise follows: the three years by means of Q3 2020 noticed a ~70% promoting at costs between ~$88 and ~$232. There was a ~9% trimming in This fall 2021 whereas in Q2 2022 there was the same improve. The inventory at the moment trades at ~$373. The final quarter noticed a ~8% trimming and that was adopted by a ~4% trimming this quarter.

Meta Platforms (META): META is a 2.68% of the portfolio place bought in Q1 2018 at costs between ~$160 and ~$190. The stake had seen incremental shopping for since. The three quarters by means of This fall 2022 noticed a ~125% stake improve at costs between ~$90 and ~$235. The final three quarters noticed a ~40% promoting at costs between ~$127 and ~$326. The inventory is now at ~$337.

Amazon.com (AMZN): The two.45% AMZN stake noticed an enormous ~130% stake improve throughout This fall 2022 at costs between ~$82 and ~$121. That was adopted by a ~25% improve within the subsequent quarter at costs between ~$83 and ~$113. The inventory at the moment trades at ~$144. There was a ~7% trimming final quarter and the same discount this quarter.

Lam Analysis (LRCX): The two.19% LRCX stake was in-built Q3 2020 at costs between ~$294 and ~$385 and the inventory is now at ~$707. There was a ~5% trimming this quarter.

TJX Corporations (TJX): TJX is a 1.74% of the portfolio place that has been within the portfolio for properly over fifteen years. The place has wavered. H1 2020 noticed a ~25% stake improve at costs between ~$37 and ~$63. The inventory is now at ~$89. This quarter noticed a ~10% trimming.

Adobe Techniques (ADBE), Eli Lilly (LLY), KLA Corp (KLAC), Petroleo Brasileiro (PBR), and Teck Assets (TECK): These small (lower than ~1.75% of the portfolio every) stakes have been diminished through the quarter.

Stored Regular:

Ameresco (AMRC): The small 0.70% of the portfolio stake in AMRC was saved regular this quarter. They’ve a big possession stake in Ameresco.

Observe: GMO has important possession stakes within the following companies: GrafTech (EAF), Clear Power Fuels (CLNE), Aemetis (AMTX), Adecoagro (AGRO), and Canadian Photo voltaic (CSIQ).

Under is a spreadsheet that exhibits the adjustments to Jeremy Grantham’s GMO Capital 13F portfolio holdings as of Q3 2023:

Supply: John Vincent. Information constructed from GMO Capital’s 13F filings for Q2 2023 and Q3 2023.

Editor’s Observe: This text discusses a number of securities that don’t commerce on a significant U.S. alternate. Please concentrate on the dangers related to these shares.