This is about the Pabrai Wagons fund (WGNIX). The manager is optimistic long-term, noting the fund trades at 9 times earnings vs. the S&P 500's 28 times, but it fell 13.29% over the past year, far behind the index's +15.16%, mainly because it missed the Magnificent Seven tech rally. Key holdings: Edelweiss Financial Services (24.8% of the fund, an Indian financial firm planning to spin off four units, with the first IPO valued at $1-1.5 billion, above its $1.2 billion market cap); TAV Havalimanlari (16%, a Turkish airport operator whose Almaty Airport alone is worth nearly its entire $2.4 billion market cap); and Warrior Met Coal (9.3%, a metallurgical coal company).
One-sentence summary: The author holds an [optimistic] stance on the portfolio's long-term prospects, believing that the current 9x valuation offers a significant margin of safety compared to the broader market's 28x, though the fund has significantly underperformed its benchmark over the past year.
WGNIX rose 5.53% from March to June 2025, outperforming the S&P 500's 4.70%; in June alone, it gained 8.97%, also exceeding the index's 5.09%. However, for the 12 months ended June 30, 2025, the fund fell 13.29%, significantly underperforming the S&P 500's +15.16%. Since its inception on September 29, 2023, the annualized return stands at 4.63%, well below the index's 25.20%. The report argues that the fund's early underperformance was due to the S&P 500 surging 41.65% (through February 2025) driven by the Magnificent 7, while WGNIX gained only 2.59% over the same period.
The fund's trailing P/E is 9x, compared to the S&P 500's 28x (far above its long-term average of 16x). The top ten holdings account for a high concentration, totaling 18 positions with a net asset value of $78.93 million. Sector allocation is primarily in financials (24.8%), industrials (22.2%), and consumer discretionary (16.5%).
Performance Comparison:
| Period | WGNIX | S&P 500 TR |
|---|---|---|
| 2024.7.1-2025.6.30 (1 Year) | -13.29% | +15.16% |
| 2025.3.1-6.30 | +5.53% | +4.70% |
| June 2025 (Monthly) | +8.97% | +5.09% |
| Since Inception (2023.9.29-2025.6.30) Annualized | +4.63% | +25.20% |
The fund is "circling the wagons" around its highest-conviction ideas. The largest holding, Edelweiss Financial Services (India, 24.8%), has a market cap of only $1.2 billion but plans to spin off four subsidiaries, each of which the report argues is worth over $1 billion; the first spin-off is already underway, with an expected IPO valuation of $1.0-1.5 billion. The second-largest holding, TAV Havalimanlari (Turkey, 16.0%), manages 15 airports across 8 countries. The report believes that its wholly owned Almaty Airport alone is valued close to TAV's entire $2.4 billion market cap.
Top Ten Holdings:
| Position | % of Net Assets |
|---|---|
| Edelweiss Financial Services Ltd. | 24.8% |
| TAV Havalimanlari Holding AS | 16.0% |
| Warrior Met Coal, Inc. | 9.3% |
| Reysas Gayrimenkul Yatirim Ortakligi AS | 4.7% |
| Reysas Tasimacilik ve Lojistik Ticaret AS | 4.5% |
| Valaris Ltd. | 4.1% |
| Tidewater, Inc. | 4.1% |
| Alpha Metallurgical Resources, Inc. | 4.1% |
| Noble Corp. PLC | 4.0% |
| AutoNation, Inc. | 3.7% |
The remaining positions are spread across global metallurgical coal companies, U.S. offshore oil service firms, U.S. auto dealers, and U.S. homebuilders. The report does not elaborate on each of these positions individually but judges the overall portfolio to be "well-positioned to outperform the S&P 500 over the long term." The fund's turnover rate is 69%, with net management fees of $155,000.
| Ticker | Direction | Author's One-Sentence View | Key Data |
|---|---|---|---|
| Edelweiss Financial Services Ltd. | Hold & Watch | Core heavy position; the value of its spin-offs is far from being priced in by the market | 24.8% of net assets; market cap $1.2 billion; plans to spin off four subsidiaries, with the first IPO valued at $1-1.5 billion |
| TAV Havalimanlari Holding AS | Hold & Watch | Second-largest holding; the value of Almaty Airport alone is close to the entire company's market cap | 16.0% of net assets; overall market cap $2.4 billion |
| Warrior Met Coal, Inc. | Hold & Watch | Metallurgical coal company; ranks high in the portfolio | 9.3% of net assets |
| Reysas Gayrimenkul Yatirim Ortakligi AS | Hold & Watch | Turkish real estate investment trust | 4.7% of net assets |
| Reysas Tasimacilik ve Lojistik Ticaret AS | Hold & Watch | Turkish logistics company | 4.5% of net assets |
| Valaris Ltd. | Hold & Watch | U.S. offshore oilfield services company | 4.1% of net assets |
| Tidewater, Inc. | Hold & Watch | U.S. offshore oilfield services company | 4.1% of net assets |
| Alpha Metallurgical Resources, Inc. | Hold & Watch | Metallurgical coal company | 4.1% of net assets |
| Noble Corp. PLC | Hold & Watch | U.S. offshore oilfield services company | 4.0% of net assets |
| AutoNation, Inc. | Hold & Watch | U.S. auto dealer | 3.7% of net assets |