Home Business Still Has Legs in 21: The Best Mutual Fund Managers

In this news, we discuss the Home Business Still Has Legs in 21: The Best Mutual Fund Managers


NEW YORK (Reuters) – Top-performing U.S. mutual fund managers of 2020 say the so-called ‘stay-at-home’ trade will not end next year even though the pandemic is defeated. on these stocks.

Funds that were introduced early in stocks such as Zoom Video Communications Inc and telemedicine firm Teladoc Health Inc have seen their returns skyrocket this year as more aspects of daily life come online. Yet the successful coronavirus vaccine announcements by Pfizer Inc and Moderna Inc in early November helped broaden the market rally to financial, energy and leisure stocks that would benefit from an economic rebound. This has pushed the return of the S&P 500 Value Index up 5% since then, slightly ahead of the 4.1% gain of the S&P 500 Growth Index.

“It is likely that we could see a temporary cyclical rotation as the vaccine is rolled out en masse,” said Anthony Zackery, portfolio manager at Zevenbergen Capital Investments. Two of the funds Zackery helps manage – Zevenbergen Genea and Zevenbergen Growth – have gained over 130% since the start of the year through December 18, placing them both in the top 10 mutual funds in Top performing US actively managed stocks followed by The Morning Star. The benchmark S&P 500, by comparison, is up 14.8% over the same period.

GRAPHIC: Best actively managed U.S. equity funds of 2020

Still, Zackery warned that he believed a valuable trade would be short-lived. “We don’t believe that a vaccine and reopening the economy will stop the inevitable adoption of telemedicine, e-commerce and some of the other age-old trends that we are watching,” he said.

Zackery said his fund has found “fertile ground” and added some of the recent growth-oriented companies that have gone public in recent months despite their high valuations.

“Even companies like Snowflake, Airbnb or DoorDash may have a high market capitalization compared to industry comparables, but they generate sales and income, unlike companies in the dot-com era,” he said. .

With $ 21.3 trillion in assets, the U.S. mutual fund industry is the largest in the world and one of the primary ways Americans save for retirement. Overall, U.S. households own 89% of all assets held in mutual funds, according to the Investment Company Institute, making it one of the best indicators of retail investor performance.

Gary Robinson, portfolio manager at Baillie Gifford whose Baillie Gifford US Equity Growth fund has generated a return of 133.7% since the start of the year through December 18, said he remained focused on stocks of e-commerce and telemedicine which have rebounded this year and secular growth of companies like Tesla Inc.

New additions to the portfolio this year include cloud communications platform company Twilio Inc, which has gained 271% year-to-date, and insurance company Lemonade Inc, which is up 53 % since its IPO in July.

“Even after seeing relatively rapid growth, you still have a lot of leeway,” he says.

Michael Baron, portfolio manager at Baron Capital whose Baron Partners fund is up 145.6% year-to-date, said he saw no reason to change the fund’s strategy of mixing companies strong growth with financials and real estate companies.

“There is a light at the end of the tunnel but we are not making dramatic changes to the wallet after COVID,” he said.

Among the fund’s holdings is hotel operator Hyatt Hotels Corp, which Baron plans to post higher margins in 2021 after taking measures to contain costs such as laying off 1,300 people in May and signing up for the property. site Zillow Group Inc, whose shares have jumped 206% since the start of the year.

“We just don’t think we’re going back to the old ways of doing business,” Baron said.

Reporting by David Randall; Edited by Megan Davies and Dan Grebler

Original © Thomson Reuters

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