Back in the days before you could buy concert tickets on the Internet, I knew plenty of people -- myself included -- who would happily wait in line for hours to score great seats for big bands like the Rolling Stones, The Who, and Rush.
If you'd told me back then that I'd be just as excited about a mutual fund reopening, I would've looked at you like you were crazy. But now, a superstar fund is opening its doors for the first time since before I waited in line all day to see Return of the Jedi at age 12 -- and investors should take a close look at getting in on this opportunity.
A hot ticket
What has me more excited than a backstage pass to see Mick Jagger and crew is that the legendary Sequoia Fund
Sequoia has a stellar reputation for being a rare mutual fund that has consistently outperformed both its peers and the overall market. Since the fund opened its doors in 1970, Sequoia has earned an average return of more than 15% -- almost four percentage points higher than the S&P 500.
Although founding co-manager and superinvestor Bill Ruane passed away in 2005, Sequoia has been managed by Robert Goldfarb since 1998. Goldfarb proved his mettle in the bear market of 2000-02, from which the fund emerged virtually unscathed. After losing money in 1999 on large bets on insurers such as Progressive
Not the only game in town
In recent months, there have been a number of prominent fund reopenings. Popular funds from Dodge & Cox, Longleaf Partners, and others have started taking new money after being closed for several years. Even Fidelity's flagship fund Magellan opened its doors to new shareholders after a decade.
Still, Sequoia's announcement presents a unique opportunity. Throughout its history, Sequoia has held a relatively concentrated portfolio, with large positions in Berkshire Hathaway
According to the fund's latest quarterly report, Sequoia held just 24 stocks -- yet they're a diverse set of companies, ranging from flooring producer Mohawk Industries
With 25 years' worth of pent-up demand -- and a track record to back it up -- you can expect to see fund investors storming Sequoia's doors like crazed shoppers on Black Friday. Those looking for a quality fund for their portfolios could certainly do far worse.
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