Steal stock ideas from four hot funds
The overall market, at least as gauged by the S&P 500 index, returned 16% last year.
But, as you may have noticed, several mutual funds, especially those that focused on stocks with strong growth prospects, outperformed the S&P.
Here are four such funds that not only chalked up 68% to 125% returns last year, but also averaged 35% to 47% annual returns for the past three years. You could use the information I’m about to give you two ways.
You could simply buy one or more of these funds and spend your days brushing up your golf game. You don’t have to be rich to buy them. Two have no minimum initial purchase requirements and the other two require only $2,000 to get started. All are no-load funds, meaning there are no sales commissions.
But, if you’d prefer to buy individual stocks, I’m also giving you each funds current biggest holdings, plus a list of new stocks they’ve been buying lately. Here are the funds.
Baillie Gifford US Equity Growth (ticker: BGGSX): Baillie returned 125% in 2020, and averaged 47% annual returns for the past three years. As of Dec.31, Baillie’s portfolio held only 44 stocks, and its annual portfolio turnover is only 18%. So, it’s not a surprise that six of its top 10 holdings have been in the portfolio since 2017. Its three biggest holdings, as of Dec. 31 were Tesla (TSLA), Amazon.com (AMZN) and Shopify (SHOP). Baillie added only three new stocks to its portfolio last year: Workday (WDAY) on March 31, Twilio (TWLO) on May 31 and Carvana (CVNA) on July 31. The fund has no minimum initial investment requirement.
Baron Focused Growth Retail (BFGFX): Baron returned 122% last year and averaged 47% annually for three years. On Dec.
31, the fund held only 24 stocks. The biggest holdings were Tesla, Penn National Gaming (PENN), and Vail Resorts (MTN). Although Baron’s annual turnover rate has historically been only 5%, this year appears to be an exception. It added five new holdings during the year, including four on Dec. 31. Those were Spotify Technology (SPOT), Denali Therapeutics (DNLI), BionNTech (BNTX), and Schrodinger (SDGR). Baron’s minimum starting investment is $2,000.
Fidelity Advisor Series Growth (FAOFX): Fidelity returned 68% in 2020 and averaged 40% annually for three years. On Nov. 30, the fund held 227 stocks. Its three biggest holding were Microsoft (MSFT), Amazon, and Apple (AAPL). The average annual turnover is 78%. Recent buys include Peloton Interactive (PTON), Samsung Electronics (SSNLF) and Chewy (CHWY) on Sept. 30, Array Technologies (ARRY) on Oct. 31, and Moderna (MRNA) on Nov. 30. Fidelity has no minimum initial investment requirement.
Columbia Small Cap Growth (CMSCX): Columbia returned 70% in 2020 and averaged 35% annually for the past three years. As of Nov. 30, the fund held 92 stocks. The average annual turnover is 76%. Its three biggest holdings were Planet Fitness (PLNT), Bio-Techne (TECH), and Caesars Entertainment (CZR). Recent portfolio additions included Penn National Gaming, Sunrun (RUN), Spirit Aerosystems (SPR), and Olema Pharmaceuticals (OLMA), all on Nov. 30. The fund’s minimum starting investment is $2,000.
As always, past performance doesn’t necessarily predict future returns. Do your due diligence. The more you know about your investments, the better your returns.
Harry Domash of Aptos publishes the Winning Investing and the Dividend Detective websites. Contact him at www.winninginvesting.com or Santa Cruz Sentinel, 324 Encinal St., Santa Cruz, CA 95060. To see previous Domash columns, visit santacruzsentinel.com/ topic/Harry_Domash.