JEFFREY AUXIER RECENTLY ADDED CATTLE TO his profitable 108-acre hazelnut and timber farm, south of Portland, Ore. How fitting for a money manager who has been stampeding the competition for the past 10 years -- and who knows a few things about asset diversification.

Auxier's $92 million Auxier Focus Fund (ticker: AUXFX), which celebrated its tenth anniversary in July, has returned an average of 5.40% annually for the past decade through Sept. 3, outpacing 96% of its peers in the moderate-allocation category, according to Morningstar. Moderate-allocation funds hold 50% to 70% of their assets in equity and the rest in bonds or cash. The Standard & Poor's 500 stock index slipped an average of 1.24% a year over the same 10-year span.
This year Auxier Focus is in the middle of the moderate-allocation pack, with a 15% return. But along with its performance record, the fund's multi-cap investment approach, lengthy management tenure and relatively easy-on-the-wallet expense ratio of 1.35% make it a compelling investment.

Auxier targets fundamentally sound companies, with strong balance sheets and predictable cash flows, whose shares have been hurt by seemingly fixable problems. His roughly 120-stock portfolio is headlined today by blue-chips Philip Morris International (PM), Wal-Mart Stores (WMT), Coca-Cola (KO) and payroll processor Paychex (PAYX). He is also making bets on lesser-known names such as Alliance One International (AOI), a leaf-tobacco producer, with a $350 million market value. He's betting the stock can double from a recent $4 a share. "When you can buy cash flow, you gotta buy it," says the Warren Buffett disciple.

Auxier also sees good value in corporate debt, and has invested more than 20% of his fund's assets in bonds of companies such as Waste Management (WM), Time Warner (TWX) and Dr Pepper Snapple Group (DPS). He owns Dr Pepper stock, too, and it's his best performer this year, up 63%.

If Auxier thinks a sector is cheap, he buys several stocks. He jumped into health-management organizations last year when shares were selling for just four to five times earnings. He also bought supermarket operators Kroger (KR) and Safeway (SWY).

The fund's top sectors: consumer goods, consumer services and health care. Auxier, 50 years old, speaks softly, in a voice likely stolen by the wind that whistles through his timber fields, or drowned out by the noise of the tractor he loves to ride. He will quickly tell you that it takes patience and humility to be a good farmer -- and a bit of bravado, too.

Investors run into trouble when they become too emotional or greedy, he contends. That said, it is hard to resist the once-in-a-generation "buying opportunities" in high quality companies produced by the financial crisis of the past two years. "A true investor lives for this moment," Auxier says. "But if you lack humility, you'll get killed."

Auxier is fully invested, although he recently pared stakes in companies such as for profit education specialists Apollo Group (APOL) and Bridgepoint Education (BPI).

AUXIER FOCUS HIT SOME BUMPS in the past decade, including a big one last year, when it dropped 25% -- the second yearly loss in its history. Barron's last profiled Auxier five years ago ("Town & Country," June 7, 2004), when he was tracking the indexes in the midst of another turbulent market.

But those who bought the fund then have been richly rewarded. Auxier Focus ended 2004 about tied with the market, up 10.7% for the year. Since our first piece ran, the fund has returned 12.76% through July 2009, compared with a drop of nearly 3.96% in the overall market