Healthcare, alternative energy drove best US stock funds in third quarter

[NEW YORK] The top-performing US stockpickers of the third quarter made bets on companies ranging from healthcare technology to wind power, helping some funds post gains of 40 per cent or more during a three-month stretch that ended with the S&P 500 suffering its first monthly decline since March.

The US$7.4 million WP Small Companies fund posted the best overall performance among actively managed US equity funds with a 45.9 per cent gain through Sept 29, according to Morningstar Direct data released on Wednesday. Its largest position by far was in healthcare technology company Ontrak, which made up nearly 34 per cent of its portfolio. Shares of the company are up nearly 268 per cent for the year to date.

The US$5.2 billion Baron Partners Retail fund followed with a gain of 45.4 per cent for the quarter, slightly ahead of the US$480 million Baron Focused Growth Retail fund.

The US$95 million Shelton Green Alpha fund posted a 29.7 per cent gain for the quarter, making it the 7th-best fund overall and the best performer among funds that invest based on environmental, social and governance factors. Its largest position was in Vestas Wind Systems, which is up 55 per cent for the year to date.

The outsized gains came in a quarter in which the benchmark S&P 500 rose 8.5 per cent overall. The index dropped 3.9 per cent in September, its first monthly decline since the Federal Reserve launched unprecedented stimulus measures in response to the coronavirus pandemic.

Among fixed income managers, the US$3.3 billion AlphaCentric Income Opportunities fund posted the best return among active funds with a 10.4 per cent gain for the quarter. The fund had its largest positions in mortgage-backed securities, including Option One Mortgage Loan Trust and Soundview Home Loan Trust, according to Morningstar data.

The US$862 million MicroSector FANG+ 3x Leveraged fund posted the best return among all funds. The fund, which uses options to triple the daily gain or loss of technology giants such as Facebook and Apple, gained 94.5 per cent over the quarter, pushing its year-to-date return to 205.5 per cent.

REUTERS

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