Drawing on interviews and public fund materials, Business Insider compiled what helped each fund stand out in 2023, and what managers are counting on for success in 2024. The list is based on Morningstar’s database of large-cap US equity funds and reflects performance as of November 17.
Portfolio managers Andy Colyer and Dan White didn’t have to make any radical changes to beat 96% of their competitors this year.
Instead, a fundamentals-first, bottoms-up approach coupled with a long-term mindset bore fruit, as the fund reaped the rewards of investments in companies like Nvidia and Microsoft.
Colyer and White focus on three factors when making an investment: strong management teams that allocate capital intelligently; revenue growth, as well as free-cash-flow growth; and a reasonable valuation.
The result is large allocations within the fund to stocks in the Magnificent Seven with a particular focus on the picks-and-shovels stocks of the AI trade. But there are also non-consensus calls as well, including positions in Chipotle and Intuitive Surgical, as the fund positions itself for strong growth in what White calls the experiential retail and medtech industries.
For the year ahead, Colyer and White agree that they aren’t in the business of prognosticating where the market will go.
There’s so many crosscurrents of what makes the market move in any 12-month period that our opinion is it’s impossible to get your arms around all of them and make a prediction, White said. So, if that’s the case, what can you do?
He added: We make sure we own very fundamentally strong companies that have all the attributes that we talked about before, and we’ll let the chips fall where they may.
Biggest holdings (as of October 31): Microsoft, Amazon, Nvidia, ServiceNow, and Mastercard
