3 ultra-growth fund managers who are crushing the market during a chaotic year told us how they’re doing it — including their biggest themes and top picks for the future

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Business Insider recently spoke with three growth-focused investment pros who are delivering very strong returns in 2020.
Fund managers James Callinan and Chris Retzler, and portfolio manager Jason Tauber, have all dramatically outperformed their peers and benchmarks.
They described what they’ve been doing in the wake of the dramatic April-June rally and how they’re positioning their portfolios for future success. 

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Halftime is a brief pause that can be used to reconsider, recalibrate, take stock, or maybe even celebrate.

The first half of this year included a historically steep market plunge and a dramatic recovery. As the second half gets underway, investors might have more “ifs” than anything else, and more questions than answers. But there are a few experts who can say they succeeded during that those frantic six months.

In July, Business Insider spoke to one portfolio manager and two mutual fund managers who have hauled in huge returns in 2020 when many of their peers have struggled to break even. What follows is a summary of what’s worked, how they’re investing, and the stocks they think have the best shot at success in the future.

(1) James Callinan, Osterweis Emerging Opportunity Fund

What he’s done: As of August 3, Callinan’s fund has returned 40.58% to investors year to date, according to Morningstar. The typical small-cap growth fund returned 7.78% over the same period, meaning Callinan’s returns are five times greater.

What he’s doing now: He told Business Insider that lately he’s been slowly dialing down his investments in cloud computing and other tech companies that have skyrocketed since the COVID-19 pandemic began. He’s investing more in what he dubbed “real businesses” that are a bit old-fashioned — and in some cases, very cheap.

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“These are companies that have not benefited from the bull market, so their stocks are in the same place they were maybe in February,” he said.

His picks: Callinan’s favorite “real” stocks as of July included manufacturing and life-science equipment maker Brooks Automation, lease-to-own retailer Aaron’s, manufactured- and mobile-home builder Cavco Industries, online lender Enova Financial, bank operator Meta Financial, and residential property services company FirstService.

(2) Chris Retzler, Needham Small Cap Growth Fund

What he’s done: Retzler’s tech equipment-oriented fund returned 27.17% to investors as of August 3, nearly four times as much as the typical fund in the space. He’s long been one of the most successful small-company fund managers and Morningstar says he’s outperformed 99% of his peers over the 12 months that ended on June 30.

What he’s doing now: Retzler said he had his fellow managers put more cash into stocks during the recent sell-off than at any other time the last 12 years. Much of that was spent on companies like chip equipment makers that can benefit from the creation of 5G wireless infrastructure, and “work from anywhere” companies.

“Communication and infrastructure and security …read more

Source:: Business Insider


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