The fund posted gains in each of the past five years except 2002, when it lost 11 percent - though still better than the category's 27.6 percent tumble. Jensen's cautious strategy can provide high performance in down markets, but lower octane in bull markets. The low-turnover, no-load portfolio includes holdings in companies like Stryker, The ROE hurdle demonstrates consistency to this $2.8 billion fund's four managers, and keeps out momentum-driven stocks and other flashes in the pan. Takes a no-nonsense approach to stocks: Every company in the 25-stock fund must have produced at least 15 percent annual return on equity each year for 10 consecutive years. Over the past five years, Blue Chip Growth is down about 2 percent annualized - still in the top 10 percent of its class, according to Morningstar. These stalwarts give Puglia an anchor as he invests in companies with faster-growth potential like AmgenĪnd semiconductor leader Maxim Integrated Products Some of the fund's core holdings are the giants of the Standard & Poor's 500 Index, such as Citigroup Manager Larry Puglia has generated above-average returns for shareholders of this $8.3 billion no-load portfolio, which carries an expense ratio of 0.95 percent and annual turnover of 33 percent. Rowe Price Group lineup understandably will be a lower-risk proposition. Rowe Price Blue Chip GrowthĪ large-cap growth fund in the conservative T. Scant annual portfolio turnover of 17 percent and a 0.73 percent expense ratio - less than half the category's 1.54 percent average - enhance the fund's appeal. 28, trouncing its category's 15.4 percent average yearly loss. Amcap rose an annualized 3.2 percent over five years through Jan. The independent streak produces a low-risk portfolio that's delivered high returns. Together, they focus on stocks with rapid earnings growth and strong financial foundations, building the 134-stock portfolio one name at a time. In this case, four veterans each have a slice of the fund. Like other American offerings, Amcap is team-managed. Three of these generated positive results, including 2000, when the fund's 7.5 percent gain beat large-cap growth's 13.1 percent average decline. The $18.4 billion portfolio topped the large-cap growth category average in each of the past five years. The American Funds family has been attracting more new cash than any other U.S. You want to understand the strategy your manager is applying, and then get comfortable with the risks." American Funds Amcap "It will give you a good sense of how it's handled different environments. "You definitely want to look at how a fund has behaved in the last five years," said Kunal Kapoor, Morningstar's director of fund analysis. Other established funds include Morningstar's current favorites: Fidelity Capital Appreciation William D'Alonzo has a long and respected track record. Manager Scott Schoelzel has revived his concentrated fund, and Brandywine Blue's The large-cap growth sector is full of first-rate offerings. Keep in mind that these funds meet just one set of criteria. The Westcore and State Street funds were comparable, but Westcore's overall record was better. Still, a solid history of positive annual returns puts this conservative fund among the top five. The Jensen Portfolio would have passed this second test as well, but it's lagged the category average over the past two years. Rowe Price Blue Chip Growth and Westcore Growth. American Funds Amcap Shepherd Street Equity State Street Research Legacy Raising the bar, funds needed to have provided returns over that period with below category-average risk and cheap expenses - and sport a current P/E ratio of 30 or less.įive funds made that cut. The focus then turned to large-cap funds beating the category average in each of the past five years. The Old Westbury fund was disqualified because it holds mostly mid-capitalization stocks even though it's classed with the large-caps. Two surfaced: The Jensen Portfolio and the Old Westbury Mid Cap Equity fund. So the search was modified, instead looking for large-cap funds with positive returns in four of the past five years. An initial effort tried to find large-cap growth funds posting a gain in each year from 2000 through 2004. A search of Morningstar's Principia database illustrates the harsh beating that large-cap growth funds suffered.
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